Next March, the BJP will complete three years in office. There are several assessment yardsticks e.g. performance with regard to GDP growth, inflation, fiscal deficit, poverty reduction, economic reforms. Disinflation is part of a global phenomenon, so neither the BJP (nor the previous UF government) gets any credit for the structural decline in inflation to less than 3 percent today; the opening up of the economy was the cause, and not misguided and misinterpreted monetary or fiscal policy. Change in poverty is a long-term phenomenon made even longer by the highly misleading National Sample Survey data. GDP growth has been of a new Hindu constant variety for the last twenty years (at around 5.5-6.0 percent). Economic reforms – since 1991, we are all Manmohan Singhites. The only yardstick is whether any government pressed the accelerator. Precious few have; indeed, none since the first surgery of 1991. After that, it has been either band-aids or tinkerization – indeed, a radical reformer is one who did both. Thus, one is left with just the fisc.

Most economic indicators in India have stayed unaffected in the last two years (and likely next year as well). Economic growth fell in BJP's first year, and the second year has seen a cyclical bounce. The non-ICE portion of the Sensex has gone nowhere for the past eight years, and it would be disingenuous for anybody to claim that any government had anything to do with the worldwide ICE explosion. And trade taxes (as have all other taxes) gone up with the BJP's experiments with the nation.

So what has the BJP achieved? On the plus side, the Finance Minister, Mr. Yashwant Sinha, has sounded like a true economic reformer; passed pending reform bills (the BJP has yet to come up with an economic reform bill of its own or one which was not in the pipeline); and claimed that the ballooning fiscal deficit was his number one priority. Talk is cheap, apparently. The consolidated budget deficit under BJP's reign has been the highest in history, both in terms of an individual year (1999-2000) and for any consecutive three-year period. But this result is not indicated by the "official" data (see table).

If you have been confused and misled by the plethora of measures pertaining to the fiscal deficit, you are not alone. All governments have played with mirrors in order to hide their fiscal ugliness. Fiscal deficit is simply the government's (centre plus states) revenue minus government expenditure. Because of various transfers (e.g. small savings collections) there are elements of double counting and the official fiscal deficit is therefore higher than the correct (RBI approved!) measure which is the stated deficit adjusted for inter-governmental transfers. An even more correct measure is not including disinvestment proceeds in government revenue since privatization is a sale of an asset, not revenue (or losses) from government operations.

An additional problem with the stated fiscal deficit pertains to the measurement of the denominator, nominal GDP. The CSO did a one-time step-up adjustment to nominal income by 8.78 percent in 1993-94. Normally, statistical organizations provide final adjustments to such irregular breaks; pending such a move, the table uses adjusted nominal GDP data i.e. nominal GDP data from 1970 to 1993 was "smoothed" so that the break year, 1993-1994, does not show a one-time break of 8.78 percent.