Winning elections not linked to economic growth.

"In India, there is no evidence that good economics can win you elections. There is no guarantee that a government that focuses on the economy will get re-elected," said Shankar Sharma. "The Modi-led BJP government is doing what it thinks is right for the country." Seems like an oxymoron. How can it be right for the country if it is bad for the economy? "India's economic report card continues to be in the red as the year draws to a close, with 10 of the 16 high-frequency indicators below the five-year average trend as of November, according to the Mint Macro Tracker." "India's macro-economic outlook is 'more subdued and uncertain than in recent years', the International Monetary Fund (IMF) said in its latest country report on India." This is hurting ordinary citizens. "India's grocery consumption basket shrank by an average 5 kg per household in the 12 months ended September from the year earlier, although they spent slightly more overall." The average basket size dropped by 3%, from 222 kg in September 2018 to 217 kg in 2019, but the cost went up to Rs 15,015 in 2019 compared to Rs 14,724 in 2018. Average values do not reveal how many of the rural poor are facing starvation, as Sayantan Bera discovered. India has been lucky because low oil prices helped to keep the current account deficit (CAD) under control, while "Low global interest rates have helped India attract $18.6 billion from foreign portfolio investors (FPIs) in 2019 so far," wrote Joshi and Tandon. The inflow of foreign currency ensured that the rupee weakened slowly, which allowed the Reserve Bank (RBI) to cut interest rate by 135 points. However, we must guard against any external shock because "fragile economies fall harder in a risk-off scenario". "Consensus seems to be building that the economy needs government intervention to tide over the slowdown," wrote Rajrishi Singhal. Which means increased government spending. But, "International credit rating agencies have already served notice on India, stating unequivocally they won't take kindly to any fiscal slippage." Singhal thinks that a rating downgrade will not affect flow of foreign funds looking for higher returns. Trouble is that rating agencies can and do influence investment decisions even in the US. To earn the faith of global investors "the government will also have to start improving the quality of data it releases", wrote Singhal. What if the data shows that our economy is much worse than we think? The government has to be very careful before increasing its spending to stimulate economic growth, wrote an editorial in the Mint. "So long as the rate of interest paid on government debt is higher than the rate at which the economy expands, our debt would mount rapidly and revenue growth will not be able to lighten that load." To reduce yields on government bonds the RBI resorted to "Operation Twist", wherein it bought long term bonds while selling short term ones. "The yield on the 2029 benchmark bond fell as much as 15 basis points to 6.604%", while the GDP grew by only 4.5% in the second quarter of 2019. Hence Modi has forgotten about the economy and is concentrating on winning elections. Thankfully, they are not related.