New Delhi, June 11: With the Prime Minister Narendra Modi-led previous National Democratic Alliance government's claims called dubious by National Sample Survey Office (NSSO), another setback for the current PM Modi government arrived on Tuesday when former Chief Economic Adviser Arvind Subramanian claimed that ruling dispensation overstated the GDP growth by about 2.5 per cent.
Subramanian was of the opinion that the actual average annual growth between 2011-12 and 2016-17 may have been about 4.5 per cent, not seven per cent, as claimed by the ruling dispensations - be it Congress-led UPA or BJP-led NDA. Referring to the research paper, the former CEA to PM Modi - between 2014-2018 - said, as NDTV reports, "The Indian policy automobile has been navigated with a faulty, possibly broken, speedometer." Narendra Modi Govt's GDP Surge Claim Dubious, 36% of Firms in Database 'Untraceable or Misclassified': NSSO Report
Attributing the overestimation to 'methodological changes' and assertations as non political, Subramanium said, "My new research suggests that post-global financial crisis, the heady narrative of a guns-blazing India - that statisticians led us to believe - may have to cede to a more realistic one of an economy growing solidly but not spectacularly."
Stating that the 'inaccurate statistics' on the economy's health dampen the impetus for reform, the academician opined that had India's GDP growth was actually 4.5 per cent, the urgency to act on the banking system or on agricultural challenges may have been greater, reports Indian Express. Adding on, he suggests that GDP estimation be revisited by an independent task force, which should be comprised of national and international experts, statisticians, macro-economists and policy users. IMF's Gita Gopinath Says India Must ‘Transparently Communicate’ Its Growth Numbers.
On the rising unemployment rate in India, Subramanian said, "In reality, weak job growth and acute financial sector stress may have simply stemmed from modest GDP growth. Going forward, there must be reform urgency stemming from the new knowledge that growth has been tepid, not torrid; And from recognising that growth of 4.5 per cent will make the government's laudable inclusion agenda difficult to sustain fiscally."
Earlier in April this year, World Bank had said that India's GDP growth is expected to accelerate moderately to 7.5 per cent in Fiscal Year 19-20, driven by continued investment strengthening, particularly private-improved export performance and resilient consumption. India’s GDP Expected to Expand 7.5 Per Cent in 2019–20: World Bank
However, the labour ministry's report on May 31 stated that India's unemployment rate increased to 6.1 per cent in 2017-18, which is 45-year-high. It had shown 7.8 per cent of all employable urban youth being jobless, while the percentage for the rural was 5.3 per cent. The joblessness among male on all India basis was 6.2 per cent, while it was 5.7 per cent in the case of females. India's Unemployment Rate Increases to 6.1% in 2017-18, Highest in Last 45 Years
With reports of rising unemployment rate being criticised by both the opposition and economists, Prime Minister Narendra Modi formed two separate special committees to take appropriate steps accordingly.
(With Inputs From Agencies)