Last week, during the Budget Session, the Indian Finance Minister, Mr P Chidambaram, announced that the Indian GDP registered a growth of 7.5% during 2004-05, and is likely to grow at the rate of 8.1% during 2005-06.
This was a great news!!! - The Sensex jumped beyond 10,000 mark, the analysts commented on how India is (almost) catching up with China, Indian media had a hay-day with headlines, and the captains of Indian industry (self)-congratulated the government (since the gap between govt and industry is decreasing)....
In any case, to learn how one can sustain this kind of growth rate - in fact, to move to a growth rate of 10% - one must look at how we achived this.
As the FM said that "I believe that growth is the best antidote to poverty."... we have fianlly found a quick and sure formula for economic growth and eradication of poverty!!!!
Er... lest one feels that there is anything exceptional and "wrong" about such "creative accounting", let us also have a look at how India's agricultural GDP showed a 9.1% growth during 2003-04 (i.e., when India was "shining";0):
In 2003-04, India produced 212mn tonnes foodgrains. This was a great jump from 2002-03, when the foodgrain production was 174.2mn tonnes, and a cause to celebrate.... till one noticed that actually, 02-03 was a bad year due to monsoons and that India had produced 212mn tonnes of foodgrain in 2001-02 as well!!!
For more such "economic miracles", have a look at:
A World Deceived By "Numbers/ Facts"
Governments as "Enrons"
The Real "Miracle" of Chinese FDI Figures
FDI: China and India - Just a Difference in Definition!!!