May 2014 was a great month for Narendra Modi and the Bharatiya Janata Party. May 2016 doesn't quite live up to those standards – the first Lok Sabha majority in three decades is hard to compete with. But it might come in second place. The government announced on Tuesday that year-on-year Gross Domestic Product growth for 2015-'16 came in at 7.6%, faster than the previous year's 7.2% and much more than China's 6.7% for the same period. That retains India's fastest-growing-major-economy status and, coupled with the BJP's electoral victory in Assam and some promising monsoon forecasts, wraps up a very positive month for the Modi government.
Government data showed that India's GDP, the sum total of all goods and services produced in the economy, had grown at a whopping 7.9% in the January-March quarter. That is a very promising indicator, after growth of 7.2% in the previous quarter, and it beats consensus estimates by economists of around 7.5% for the year's last quarter.
Indeed, the Central Statistics Office had revise downward the GDP estimates for the previous three quarters, but the 7.9% growth between January and March was enough to ensure the annual number still came in at 7.6%.
The margin of these estimates suggests that even with the various questions about the government approach to assembling its GDP numbers are suspect, there is clearly a positive trend. China, meanwhile, fell to its slowest quarter in seven years.
Importantly, the statistics also suggested that India's manufacturing sector is finally seeing some sustained gains, growing at about 9.3%. Agriculture too had a marginally marginally positive indicator, coming in at 1.2% (against a forecast 1.1%) and consumption too seems to be growing.
These are, effectively, the green shoots that the government keeps insisting are visible in the economy, although until now those would get buried under one bad quarter with anomalous inflation or industrial data. This time, however, there's another aspect that could help turn those green shoots into something more permanent: the monsoon.
Forecasts from both the Indian Meteorological Department and Skymet, India's only private forecaster, have both predicted a better-than-average monsoon. The rains are expected a week later than usual, but they are still on track to being more than 6% above the long-period average, bringing hope after two drought years in a row.
India's economy, especially the large agricultural sector, is still heavily dependent on the monsoon, and a good rainy season could improve output and consumer demand across the country.
The cherry on top of this somewhat presumptive cake – GDP numbers may yet be revised and monsoon forecasts have been awfully wrong in the past – was something much more concrete for the BJP. After a terrible electoral year when the party lost in both Delhi and Bihar, it managed to notch up a momentous victory in Assam and expand into several other states. Almost as importantly, its chief rival, the Congress, continued its gradual slide into obsolescence.
This might even give it the numbers, along with parties not aligned with the Congress in the Rajya Sabha, to pass the Goods and Services Tax Bill in the Monsoon Session, a move that would bring plenty of momentum to its legislative efforts as well as a big victory in the run-up to next year's Uttar Pradesh elections.
Much could yet go wrong, but as Modi looks ahead to his foreign trips at the start of June – including addressing a joint session of the US Congress – he should feel comfortable notching May up in the victory column.
