Chair of the 16th Finance Commission Arvind Panagariya dismissed ideas suggesting that India's unexpected economic growth, which exceeded 8% in the previous quarter, was skewed.
At the BT Best Banks Awards, the former VC of Niti Aayog declared, "If I fudged the GDP numbers this year to raise my growth by 2%, I will have to hide the GDP by 2% next year too...at this base, I will have to fudge it by 4% to get my growth numbers tallying."
"The experts turned out to be wrong in their forecasts by several miles," Panagariya stated. Some analysts speculated that GDP may have been "overstated" due to a stark difference in growth rates between GDP and Gross Value Added (GVA).
He argued it couldn't be all tax money. "If you're an economist, that is almost absurd because tax revenues are likewise linked to output. A specific quantity of output linked to tax revenues is within the authority of the Center."
"If you have to question, then you have to pinpoint your source and suggest how to improve it," said Arvind Subramainum in response to a query on why prominent economists like Raghuram Rajan had doubts about India's macros. The current administration did not advocate for this growth technique. A commission was engaged, one of the two economists being a member; it was started by the previous administration."
On March 15, Arvind Subramanian, a former senior economic adviser, remarked that the new GDP figures for India are "absolutely mystifying" and hard to understand.
Subramanian remarked, "I can't understand the latest GDP numbers; they are mystifying and don't add up," during his speech at the India Today Conclave. For instance, the government's implied estimates of inflation range from 1.5% to 1.5%, but the real inflation rate is closer to 5%.
According to Panagariya, this culture of "velcro for negative news and Teflon for positive news" is the root of such criticism. "Some people have recognized this and made it a business to stay in the limelight."
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