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Economic Revival or Dead Cat Bounce?
Although growing at rates that are globally enviable, the Indian economy has been unstable over the last several years. False dawns, shifting time series, and the selective use of data has provided fodder for scoring political brownie points. Citing near-term data, the Economic Survey 2017–18 argues that the Indian economy is on the path of recovery even as it raises some red flags. What does a comprehensive appraisal of the data show? Is this “recovery” sustainable or is this yet another case of a dead cat bounce?
A great deal of heat and dust is being generated currently over recent economic growth trends in India. Much of this is unfortunately rooted in political debates drawing predetermined conclusions cherry picking data. Although the Economic Survey, brought out as it is by the treasury, cannot be expected to rise fully above this din and noise, it is perhaps a government document that comes closest to this.
First, it cannot paper over inconvenient facts as it presents and updates the raw data each year in a comprehensive manner. Second, it is prepared by that wing of the finance ministry that consists entirely of trained economists, usually headed by a renowned, and increasingly, globally renowned, economist as the chief economic advisor. Under their stewardship the Economic Survey has been transformed from a dismal, boring official survey of the financial year drawing to a close, to an eminently readable narrative that showcases the Economic Division’s own recent research using data not easily available to researchers. On the basis of this research, last year’s Economic Survey highlighted eight “interesting facts” about the Indian economy, while the current one highlights 10 “new” facts.
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