There is no doubt about it: 2019 was a terrible year for the Indian economy.

Though the warning signs were visible at the start of the year, the Narendra Modi government – ahead of the Lok Sabha election – insisted that all was well. Then came the revisions: The Reserve Bank of India predicted in February 2019 that the country’s Gross Domestic Product growth for Financial Year 2019-20 would clock in at 7.4%. By October that was down to 6.1%. And in December, the RBI said that India likely grew at just 5%.

A cut that huge is not normal. Some analysts expect the final number, once the financial year is done, to be even lower. Meanwhile, the auto sector posted its worst sales in two decades in 2019. Leaked reports revealed that consumption and employment were also at multi-decade lows. And the government itself struggled mightily to draw in revenue from a tottering economy, with the Centre at one point falling many months behind in providing funds due to the states.

Clearly, 2019 was dire.

What made it worse was the Union Budget that came in the middle of the year. Before the elections in May 2019, many believed that the government’s insistence that nothing was going wrong was simply campaign bluster. With a big victory, the hope went, the government would drop the facade and get to work on arresting the economic slide. The Budget, however, left heads scratching (and even had supporters of Prime Minister Narendra Modi comparing him to former Prime Minister Indira Gandhi).

Ostriching

As the terrible indicators, GDP growth revisions and unhappy comments from industry began to mount, Finance Minister Nirmala Sitharaman attempted to undo some of the damage – by essentially taking back a large portion of her budget proposals. But the responses were ad-hoc, and accompanied by others in government continuing to claim that all was well and anyone saying otherwise was simply biased against Modi.

This even prompted us to ask, as part of Hard Times, Scroll.in’s series on the economy, whether the Modi government even understands what is going on with the Indian economy.

It is worth mentioning that the two biggest decision-makers for both the government and the Bharatiya Janata Party, Modi and Home Minister Amit Shah spent the second half of 2019 waging political battles of their own creation, whether in Jammu and Kashmir or in the North East.

There was no indication that the the government has a sharp focus on fixing the Indian economy – beyond repeating the words $5 trillion economy over and over like a mantra. In his end-of-decade Mann ki Baat radio address, Modi’s main reference to the economy was to encourage people to buy Indian products for the next 2-3 years, if anything a belated acknowledgment that his Make in India program has failed.

Prioritising

As 2020 begins, there is no sense that these priorities have changed. Modi and Shah seem determined to use the first year after their election to push through polices that will set India on the path towards becoming a religious state. Aside from the principles at stake, that is a task that takes much effort, time and thinking – at the cost of the economy.

But if Modi and Shah think they can just come back to the economy after pushing through their more ideological policies, they are mistaken. Things don’t work like that. The Indian economy is a complex machine and navigating it off the slippery slide it appears to be on now will take immense, sustained effort. Failing to do so in time could have decade-long consequences.

Sitharaman has an opportunity to prove her detractors wrong in the Union Budget that is expected in just a few weeks, the first one that she will properly be able to put her stamp on. But as of now there is no indication that the government has even understood how serious the situation is, never mind how to fix it.