Business Maverick: Where’s the Modi Miracle?

India’s Prime Minister Narendra Modi claim that India had become the world’s “fastest-growing large economy” was never much of an achievement; after all, the People’s Republic of China was in the midst of a significant slowdown even before the trade war. But even that no longer seems to be true. According topublished recently by government statisticians, India grew at only 5.8% in the fourth quarter of its 2018-19 financial year, less than China’s 6.4% growth in that same period.

This is the third successive quarter of slowing growth — from 8% between April and June of 2018, to 7% between July and September and then 6.6% in the third quarter, October to December. It’s hard to see this as anything other than a straightforward slowdown, of the sort that has been predicted now for some time. Yes, many questions are constantly asked about India’s growth figures. Even if you’re not convinced by the numbers, though, the trajectory is unmistakable.

Now, multiple indicators have begun to show a bit of a crisis in consumer spending as well. Passenger vehicle sales,, fell by 17.1% in April, the worst slide since October 2011. Large consumer goods companies are issuing warnings to investors about slowing demand. This could easily have been foretold: No economy can keep growing just on the basis of consumer demand.

India, meanwhile, has a new finance minister: Nirmala Sitharaman, who shifts across the road from the defense ministry. Sitharaman, who was an effective spokesperson for the party in its years in opposition, has had a less-stellar performance in government. As minister of commerce, she presided over years of anemic Indian exports and struck observers as being insufficiently sold on the benefits, or even the importance, of openness to trade.

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