Eighteen months down the line, the BJP-led NDA government has achieved a rather dubious record, of registering the 11th consecutive monthly decline in exports.When Narendra Modi took oath on 26 May, 2014, as the 15th Prime Minister of India, there was a general sense of optimism, especially on the economy front. After all, the BJP got a clear majority by contesting the Lok Sabha elections mainly on the development plank, promising to resurrect a sluggish economy.
With 282 seats, there was a sense of relief that the party won't be held to ransom by allies or restrained by the compulsion of coalition politics as was the case with the outgoing Congress and thus will be able to usher in bold economic reforms to spur economic growth.
In October 2015, exports were down 17.5% on a year-on-year basis to $21.35 billion, down from $25.89 billion in October 2014.
With exports constituting about a fourth of India's $2.1 trillion gross domestic product (GDP), a precipitating fall is bound to set alarm bells ringing in the commerce ministry, but to little avail.
The Federation of Indian Export Organisations (FIEO) has already said that the fall is worse than that witnessed during 2008-09, when exports had declined for nine months in a row.
The corresponding fall in imports over the months, coupled with falling crude prices have kept the trade deficit at $77.62 billion during the April to October period this year, down from $86.26 billion in the corresponding period last year.
But the Modi government can take little comfort in these numbers, as falling imports also have a flip side, more so non-oil imports. Import of raw gems is critical, as these are converted into jewellery for exports, earning vital foreign exchange, apart from providing employment to millions of workers.
Net imports of rough diamonds, during the April to October period this year at $8.02 billion marked a 22% decline from $10.33 billion during the corresponding period last year.
Clearly, the NDA government has a lot to worry, as many of the export-oriented sectors are labour intensive and a persistent fall in imports would lead to layoffs, a spectre Modi would least want, after having promised to create millions of jobs while campainging for the 2014 general elections.
Import of non-oil, non-gold items, a good measure of domestic demand, declined marginally to $22.75 billion during the April to October 2015 period.
Even on the domestic front, the picture is not rosy. A sample of 1,600 companies that have declared the second quarter results for this financial year shows that sales have declined by 4.8%.
With a weakened BJP and an emboldened Opposition in the wake of the recently-declared Bihar Assembly election results, the going will be tough for the Modi government to push through key economic legislations like the GST, notwithstanding the optimism displayed by union finance minister Arun Jaitley. After all, filibuster is not the preserve of the BJP alone, non-BJP parties too can put it to good effect, so what if the country suffers in the process.
In this context, a lot hinges on the ability of the Modi government to transact business in the winter session of the Parliament that commences on 26 November. Discussions on beef can wait.
