New Delhi, Sep 2: A storm is the most honest examiner in economics. It sets the same paper for every economy at the same hour, and it marks without mercy. The past thirteen months were such an examination. The steepest American tariffs faced by any major trading nation. An oil shock. The Hormuz disruption. A supply chain squeeze in every part of the world.
Now read that question paper again, because every question on it was hardest for India. The tariff wall was tallest for us. The oil shock was most cruel for us, because India imports nearly ninety per cent of its crude. The chokepoint at Hormuz sits astride the very lanes that carry our energy and trade. If this examination was loaded against anyone, it was loaded against India.
The report card is in. Germany wrote one per cent. Japan wrote half. Britain, 1.2. The United States, 2.1, the best in the entire G7. China, 4.3. India handed in its paper. Seven point eight. Nearly twice the speed of China and nearly four times the speed of America.
The storm hit India hardest, India still finished first
Not survived. Accelerated. The GDP growth rose from 6.9 per cent a year ago to 7.8 percent. The Reserve Bank had projected seven. In the five years since the world emerged from the Covid disruption, India has been the fastest growing major economy on earth every single year, and the sixth year has opened with its strongest showing arriving in the worst global weather in a generation.
Inside the number, every engine is firing
Manufacturing grew 9.2 per cent, Services grew 10 per cent, consumption grew 7.1 per cent while investment sector raced ahead with 11.9 per cent growth. For thirty years, the world insisted India must choose between the factory and the office. This quarter, the factory grew nearly as fast as the office, and both grew faster than most economies grow at all. Foreign investors have read the data. Gross inflows touched 30.7 billion dollars, the strongest in at least fifteen years of Reserve Bank records, and net inflows jumped sixty-four per cent. Gross inflows measure interest. Net inflows measure conviction. The world's money is no longer visiting India. It is moving in.
Twelve years: From Fragile Five to fourth largest
In 1991, one oil spike emptied India's vaults and sent the nation's gold to London. As recently as 2013, the world had categorized India among the Fragile Five. But those days are gone. Today, India is the fourth largest economy in the world and closing faster for third spot. Twenty-five crore Indians have risen out of multidimensional poverty. Inflation, near double digits when this government arrived, held at 4.45 per cent through this year's oil shock. Foreign exchange reserves have more than doubled. Nearly two thirds of all the foreign investment attracted since liberalisation arrived in these twelve years. Close to half of the world's real time digital payments happen in India. The economy once figured under fragile category has a new sign – that of robust, resilient and resurgent India.
Good fortune fades, good decisions last
None of this happened by chance. It happened by design, and the design carries the signature of Prime Minister Modi's courageous and decisive leadership.
When the tariff wall rose this past year, Narendra Modi-led government cut and simplified the GST, putting money in Indian pockets - the moment foreign demand was threatened. Capital spending on roads, rail and ports was sustained, not slashed. Energy and inputs were secured while West Asia burnt, and no Indian factory stopped. New trade agreements with Britain and Europe opened doors as one narrowed. Exports answered in July with substantial rise.
And the crisis management of one year rested on the patient construction of a decade. The inflation target, written into law, was maintained. The Insolvency and Bankruptcy Code cleaned the banks and made them strong enough to lend through storms. The GST stitched one national market out of dozens of tax borders. Jan Dhan, Aadhaar and mobile carried welfare straight into crores of accounts and laid the rails on which UPI runs. Make in India and the PLI seeded the factories whose output the world is now buying. Highways doubled, freight corridors opened, ports quickened. Each decision came years before it was needed. That is the foresight of Prime Minister Modi, and this quarter is its dividend.
Rahul Gandhi predicted ruin, India delivered growth
Rahul Gandhi had declared India's economy dead. A few months ago, he went further and promised an ‘economic tsunami’ worse than any crisis Indians had seen in their lives. Just imagine the shamelessness, and the sheer negativity. Who forecasts ruin, twice, for his own country, and that too the very country leading the world in growth? Twice he predicted. Twice, India proved him wrong. The tsunami never came. The growth did.
Rahul Gandhi holds a constitutional office and enjoys every privilege that attaches to it. Yet he is not questioning a government. He is running down a nation. And, if hatred for one leader has swollen into disparagement of one's own country, the country is owed an apology. In his message, Prime Minister Modi spoke of those "mired in the abyss of pessimism", echoing falsehoods and spreading despair, and of a nation that rose above them to deliver 7.8.
India has rejected this politics of pessimism, negativity and despair at every hustings. The data has rejected it too. The economy is not dead. Rather, the dead economy narrative of Rahul and Opposition is for sure.
Prime Minister saw a milestone, he set the next one
What a leader does at a moment of triumph reveals him. Prime Minister Modi claimed nothing for himself. He congratulated the people, calling the number a reflection of "our collective strength". Then he handed 140 crore Indians their next assignment: maintain the pace, deepen self-reliance, buy Swadeshi, wed in India, build Atmanirbhar Bharat, so that at a hundred years of freedom this generation hands a Viksit Bharat to its youth.
That is not a victory lap. That is a compact between a leader and a civilisation, with a date attached: 2047.
Reform by conviction: India may keep surprising on the upside
Prime Minister Modi has long said that his reforms come from conviction, not compulsion. On his initiative, more than 1,500 obsolete laws have been repealed and over 40,000 compliances removed, easing the daily life of citizens. The next generation of reforms is already under preparation. Each opens capacity the old economy never had, and each lands on an economy with the youngest workforce, the fastest digitisation and the deepest domestic market of any major nation.
The Reserve Bank projects 6.7 per cent for the full year. On this quarter's evidence, the risk to that forecast runs firmly upward. India has beaten expectations quarter after quarter.
The verdict
For thirteen months, the world threw its worst at this economy, and threw it hardest at us. The economy answered with its best. The prophets of doom made two predictions and lost both. The reformer made twelve years of hard decisions and won the storm.
Storms do not flatter. They measure. And the storm has measured India the best in the world. Seven point eight.
(The author is a Senior Advocate, practising in the Supreme Court of India)
