Why did Congress get 44 seats despite record GDP Growth?

I do not remember the occasion, but Yashwant Sinha was in BJP then. He had spoken as former Finance Minister. Prime Minister Manmohan Singh led UPA was boasting of the GDP numbers in the house to which Sinha had said," I come from Hazaribagh. Will poor people from my area be able to it eat GDP? (???? ?? ???? ?????? ?? ????? ?? ???? ??? ?) . He was pointing out to the uneven income distribution across the country. A decade later we are back to same GDP debate. UPA claims that their GDP numbers are better than that of NDA.

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This debate started with this PTI story which quoted a Government preliminary report saying India hit 10% growth during Dr Manmohan Singh as Prime Minister. Government has since said this data is yet to be accepted.

https://twitter.com/milindkhandekar/status/1030490665791053825

So if UPA did better in growth than NDA then the question arises why the congress party was reduced to its lowest ever tally of 44 in 2014 General elections. Many economists have argued, better GDP brings prosperity to people, hence they chose incumbent government. Here are my reasons for this loss despite a good growth.

In September 2008 Lehman brothers went bust. Entire world went into tailspin following this event. India was no exception. Job losses & pay cut became norm of the day. Those who would be able to save jobs were considered to be extremely lucky. This was 6 months before 2009 parliament elections. Government had no option but to go on spending & letting bank lend freely. This lead to growth as rightly pointed out by Minister Arun Jaitly.

https://twitter.com/milindkhandekar/status/1031168912476463104

UPA led by Congress returned to power in 2009 with better mandate. Congress party got 206 seats on its own. Pundits started talking about how there will be no contest in 2014 & Rahul Gandhi will become Prime Minister. This did not look impossible given the state of BJP, but Congress did not take harsh decisions on economy. This prepared the ground for 2014 loss.

Congress should have returned to fiscal discipline after such a huge mandate. This was best any party got after 1984, but it chose populism. UPA did not cut down the expenditure. Rural Development Minister Jayram Ramesh had said Government spend 4 times more money on subsidizing petroleum products than on Job gurantee scheme MNAREGA. Budget outlay for Petroleum was 1 Lac 80 thousands Crore versus 40 thousands Crore for MNAREGA. UPA 2 was forced to take this decision towards the end of its tenture in 2013.

Inflation was already high. Anti corruption movement had convinced people that corruption is the reason for inflation. This popular sentiment was on till 2014. NDA led by Narendra Modi came to power with majority and Congress was reduced to 44 seats in Lok Sabha.

After the release of old series data both UPA & NDA are attacking each other. NDA indeed delivered lower growth in last 4 years, but Prime Minister Modi has gone for fiscal prudence instead of populism since beginning of his tenure. This is good econmics, but will it be good politics remains to be seen in 2019.  

Sent from my iPhone

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