Former Chief Economic Adviser (CEA) Arvind Subramanian has voiced perplexity regarding India’s recent GDP data, characterizing it as enigmatic and challenging to decipher. Despite the economy’s unexpected surge of 8.4% in the final quarter of 2023, Subramanian expressed skepticism about the accuracy and coherence of the figures.
Speaking at the India Today conclave, Subramanian candidly admitted his struggle to comprehend the latest GDP statistics. He cited discrepancies between reported growth rates and actual economic indicators, such as inflation and private consumption. The former CEA highlighted a significant disparity between implied inflation (1-1.5%) and real inflation (3-5%), raising questions about the reliability of the data.
Subramanian also drew attention to anomalies in the GDP numbers, noting errors and omissions equivalent to 4.3 percentage points of the estimated 7.6% growth for FY24. Despite refraining from outrightly discrediting the figures, he urged for a critical assessment by others to determine their accuracy.
Furthermore, Subramanian questioned claims of India’s attractiveness as an investment destination, pointing out declines in foreign direct investment and corporate investment compared to previous years.
Conclusion
In essence, Subramanian’s remarks underscore the need for a closer examination and scrutiny of India’s GDP data. His concerns highlight the complexity and opacity of economic indicators, urging policymakers and analysts to delve deeper into the figures to grasp the true state of the economy.
