Rupak De Chowdhuri / Reuters A supporter of Congress party sits next to an effigy of Indian Prime Minister Narendra Modi during a protest against the implementation of the Goods and Services Tax (GST) in Kolkata, July 2, 2017.

Prime Minister Narendra Modi in a speech yesterday assured the nation that All is Well with the Indian economy, and that there was no reason to worry. He offered data to sell his argument. Let's go through some of the data that he offered and see what he told us and more importantly what he did not. The fiscal deficit of the government has fallen from 4.5 per cent of the gross domestic product (GDP) in 2013-2014, when Manmohan Singh was prime minister, to 3.5 per cent in 2016-2017. Fiscal deficit is the difference between what a government earns and what it spends. Yes, the fiscal deficit has come down. A major reason for this is the fall in oil prices, since Modi took over as prime minister. On May 26, 2014, the day Modi was sworn in as prime minister, the price of Indian basket of crude stood at $108.1 per barrel. As of October 4, 2017, the price was at $55 per barrel, having fallen to even lower levels during the period. Oil prices go up and down due to a host of reasons and Modi's government has almost no role to play in it. The central government has captured much of this fall in price of oil, by increasing the excise duties on petrol and diesel, thereby increasing its earnings, and thereby bringing down the fiscal deficit. As they say, there is a difference between making things simple and making them simplistic. Prime Minister Modi also claimed in his speech that the current account deficit has improved from -1.7 per cent of the GDP in 2013-2014 to -0.7 per cent of the GDP in 2016-2017. The current account deficit is the difference between total value of imports and the sum of the total value of its exports and net foreign remittances. Or to put it in simpler terms, it is the difference between outflow (through imports) and inflow (through exports and foreign remittances) of foreign exchange. Again, this has primarily been account of fall in the price of oil and thus a fall in the total amount of dollars that India pays for importing oil. India imports around 80 per cent of the oil that it consumes. Hence, Modi's government has had very little role to play in the fall of the current account deficit. It further needs to be pointed out that imports are a negative entry in the GDP calculation. So, if imports fall, the GDP rises automatically, assuming everything else stays the same. Falling oil imports are a big reason for the pick-up in the GDP growth, during Modi's tenure as prime minister. Take a look at the following chart, which was a part of the prime minister's presentation yesterday.

(Source: https://cdn.narendramodi.in/economy_1.pdf) As per this chart, the total foreign exchange reserves have risen by close to $ 60 billion during the period that Modi has been prime minister. In contrast, they were more or less flat when Manmohan Singh was the prime minister. At least that is what the above chart suggests. This is primarily because of data has been taken from the end of 2011-2012 onwards. What happens if the data would have been taken from the end of 2003-2004 onwards. Singh first became prime minister in May 2004. As of March 31, 2004, the total foreign exchange reserves were at around $113 billion. By March 2014, they had jumped to around $304 billion. This meant an increase of 10.4 per cent per ear on an average. Between April 2014 and September 2017, the growth rate in foreign exchange reserves has been at 8.3 per cent per year on an average. Foreign exchange reserves accumulated at a much faster rate during Manmohan Singh's tenure as prime minister. Hence, foreign exchange reserves accumulated at a much faster rate during Manmohan Singh's tenure as prime minister. Of course, a bulk of these gains came during the first five years of the tenure, when the forex reserves increased at the rate of 17.4 per cent per year. Between 2009 and 2014, when the Congress-led UPA made a mess of the economy, the increase in foreign exchange slowed down dramatically to 3.8 per cent per year on an average. Basically, who did well, Singh or Modi, on the foreign exchange front, depends on where we start measuring from. Prime Minister Modi further said that the interest rate the government pays on the money that it borrows has fallen from 8.45 per cent in 2013-2014 to 7.16 per cent in 2016-2017. This has happened primarily due to two reasons. The falling fiscal deficit has led to the government having to borrow lesser in proportion to the size of the economy. With the government borrowing lesser, interest rates have come down. It is important to remember here that the government has had to borrow lesser because it has increased excise duty on petrol and diesel and captured the bulk of the gain of falling oil prices. Also, after demonetisation, a huge amount of deposits ended up with banks. These deposits were reinvested into government securities and in the process interest rates on government securities came down. Prime Minister Modi pointed out that food inflation is in negative territory. The question is, is that a good thing? Why is food inflation in negative territory? It is in negative territory because farmers haven't got the right prices for their produce. This is primarily on account of the fact that agri-supply chains have collapsed in the aftermath of demonetisation, forcing farmers to sell their produce at rock bottom prices. The thing is there is no free lunch in economics. The collapse in food prices led to farmers demanding a waiving off agriculture loans and that has happened in state after state. It is ultimately expected to cost the nation, in the form of state governments compensating banks, more than Rs 2 lakh crore. Over and above this, the prime minister shared data on a few consumption data points. Car sales, two-wheeler sales and tractor sales have improved, since June, hence, all is well. What the prime minister did not tell us is the rapid rise in non-oil non-gold non-silver imports, post demonetisation. Take a look at the following chart.

Ministry of Commerce and Industry