It wasn’t the best of times, it is the worst of times, it wasn’t the age of wisdom, it is the age of foolishness, it was the epoch of disbelief, it is the epoch of incredulity, it wasn’t the season of Light, it is the season of Darkness, it wasn’t the spring of hope, it is the winter of despair, we had nothing before us, we still have nothing before us, we were all going direct to Hell, we are all getting very close – in short, Modi 2.0 is a neatly linear move from Modi 1.0 (further towards the unavoidable abyss).

A Tale of Two Governments ( compared India’s performance under the Modi government with UPA’s on a broad set of parameters including tax collections, market performance, corporate performance, GDP, foreign trade, etc. till FY2017-18. Barring Central Indirect Tax collections and very marginally GDP growth, the first 4 years of the Modi Era lagged UPA’s 10 years, on some counts by a huge margin.

Many seasons have passed since and it’d help to have another, updated look at the data. More so when the present government is keen to tout the strong ‘V-shaped’ recovery, record-high exports, record-high tax collections, and other imagined achievements.

So here goes (this time with base data sourced directly from equity databases, RBI, and ministries rather than Hindu Business Line data/graphs). Figures are till FY2021-22 except where indicated:


Commerce Minister Piyush Goyal reaches out with record-high numbers for Indian exports numbers as dependably as Mumbai locals. He conveniently omits two facts:

  • Imports are rising even faster, thus worsening the trade deficit 🤕
  • Export value is up thanks largely to high oil prices (India imports crude oil and exports petroleum products)

Here’s the comparison:

In comparison to the Modi Era, UPA 1+2 is characterized by not just higher growth rates in both imports and exports (indicating much greater momentum in the economy) but also a tighter gap between export and import growth rates, thus cushioning the INR. I seriously doubt the Sri Sris and Sadhgurus of the world will read this piece, nor will the celebs who cracked those rib-tickling fuel price jokes. Nonetheless, the abjectly poor all-around performance on this count speaks for itself and this is why the charlatans are not speaking out.

GDP Growth

The recasting of GDP data, the updated methodologies, the changes in base years…all these moves during Modi 1.0 and 2.0 were geared towards pulling down UPA era growth rates below the achieved double digits and showing current economic performance in a better light. Enough and more has already been written about these shenanigans and outright fraud, besides the objections of multiple leading statisticians and economists, so I will not add my amateur take on it. In any case, the post-doctoring numbers scream out the truth without my needing to say more:

COVID-19 cannot be a convenient excuse here because this comparison is till FY2022, which means it accounts for Nirmala Tai’s ‘V-shaped recovery’. Moreover, the previous comparison in A Tale of Two Governments till FY2018 (4 years into the Modi Era and well before COVID-19) on this count wasn’t flattering either. Finally, if the ‘beggar thy neighbor’ argument of “at least we’re growing faster than China” is going to be used then remember that China’s economy is far larger than India’s (6x nominal basis, 2.5x PPP basis) and China has pulled a far greater number of people out of poverty already.

Then again, there’s:


Despite its reactive nature, the equity market is considered a leading indicator of growth prospects. Besides, Modi’s focus on boosting self-reliance and supporting industry (well, a couple of industrialists anyway 🤷🏻‍♂️) even at the cost of all else makes this an important indicator. It also serves as a pact with the middle class who can ignore the carnage around them as long as their savings are growing. The performance?

One may be tempted to argue that end of FY2022 will make the Modi Era look poorer than it is on this count because of the recent global meltdown in equities. A couple of points to consider:

  • The meltdown is more recent. End of FY2022 was a relatively weak period, yes but far from ‘meltdown’ proportions.
  • One can also argue that the starting point for UPA in the above data (FY2005) penalizes it for the high point the economy (and market cap) was at. You can’t have it both ways, you know? 🙄

Corporate Performance

If the economy is doing well, it ought to reflect in corporate revenues. A good benchmark to achieve is annual revenue growth at the nominal rate of GDP growth (real growth + inflation).

Next, corporate profits drive valuations and this number ought to grow alongside revenues, ideally at a higher rate as businesses scale and fixed costs are spread out over a larger base. Profit growth that is out of line with revenue growth indicates either variances in costs, inefficiencies, or interventions.

Third, and most importantly, fast-growing and profitable businesses will invest in capacities only when they believe that growth prospects are favorable. Otherwise, they will payout surpluses to shareholders as dividends or buy back their equity to improve returns for residual shareholders (or simply hoard cash for better times). Hence, capex matters. In the comparison below, I have used ‘Investing Cashflows’ as a proxy for net capex. I know that isn’t ideal but in the absence of any raw capex numbers, this will have to do. All numbers are for NSE 500 stocks and FY2022 has not been considered since a number of companies have still not declared results.


  • While revenue, profit, and capex growth are clearly much higher in the UPA years (all above nominal GDP growth, which was quite high during the UPA era as we’ve already seen), the trend between revenue/profit growth and capex is more noteworthy. Despite “policy paralysis”, all-round pessimism, and allegations of serious corruption, industry seemed to have much greater faith in the economy and policy environment back then!
  • Profits growing at a higher rate than revenues (even if it was at a measly rate of 7.1%) may be touted as a positive for the Modi Era but consider the fact that this was due to the maverick, ill-timed, and completely worthless decision by the Modi government to reduce corporate tax rates besides continued cost-cutting by companies (not a good sign if it persists in the pursuit of maintaining margins)

Tax Collections

Next up, tax collections. This is an area where the Modi government is particularly fond of patting its own back. Continued growth in GST collections is one of the cornerstones of the ‘economy is great’ narrative. So how do the numbers stack up?

The gaps are large and percolate into state-level tax revenues too:

Looking at the overall picture (Central + State):

A 5 percentage point annual difference over 8-9 years makes for a substantial amount. Tax doles to corporates, slower growth rates, and a squeezed MSME/unorganized sector are all reflected in the above gaps.

Bank Credit

Finally coming to bank credit, which may be regarded as a proxy for momentum in the economy – after all, an optimistic set of people will borrow more, in’it?

Stark, to say the least. Growth rates under UPA were 2x that of the Modi Era, even accounting for the post-COVID-19 bounce back in 2022. ‘Heads I Win, Tails You Lose’ Bhakts and Nirmala Tai will of course say that the loose credit growth during UPA-2 damaged balance sheets, increased NPAs, and bestowed a mess to Modi 1.0, conveniently ignoring all the rhetoric they tout about how swell things have been since 2014 itself. Almost criminal!

Other parameters

These are just some indicators that show how starkly poor economic performance has been over the past 8+ years. There are multiple other momentum indicators that can also be used as a proxy. A few of these are:

  • Real estate activity
  • Farm income
  • 2W/4W/CV sales
  • Rail freight
  • Fuel/electricity consumption

There was a time when analysts compiled such data to figure out actual Chinese GDP growth given the legendary unreliability of rosy government growth figures. A cursory analysis of several of these indicators shows that in 2022 we are at levels seen back in 2017 or 2018 – effectively zero growth in 5 years! Unsurprising considering that a large part of India has stagnated since the 2016 and 2017 twin shocks of DeMo and a rushed/irrational GST. Unbelievable considering the official GDP growth numbers? Indeed.

Consider this – Modi’s own former CEA Arvind Subramanian hypothesized that GDP growth is massively overestimated. He compiled 17 indicators that would logically be strongly correlated with GDP growth. Anyone with a semblance of sense would expect that a growing economy will see growth in fuel/electricity/steel/cement consumption, bank credit growth, vehicle sales, air traffic, etc. Well, 16 of these 17 indicators were indeed positively correlated with GDP growth before 2011. After 2011, only 6 of them were – in other words, while GDP was growing, 11 of these 17 important indicators were negative! Modinomics!! Don’t take my word for it, read for yourself at

History is indeed going to be kinder to Manmohan Singh, just as he said. Something else he said is also being proven right on a daily basis:

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