GDP back series data stirs hornets’ nest; economist Montek Singh Ahluwalia’s big admission on fiscal deficit

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Updated: August 20, 2018 5:22:56 PM

Montek Singh Ahluwalia also admitted that the Manmohan Singh government could have managed fiscal deficit in a better manner post the global financial meltdown in 2018-09.

GDP back series data stirs hornets' nest; economist Montek Singh Ahluwalia's big admission on fiscal deficit. (Image: PTI)GDP back series data stirs hornets’ nest; economist Montek Singh Ahluwalia’s big admission on fiscal deficit. (Image: PTI)

As India is debating which government performed better in terms of the GDP growth, top economist and former chief of Planning Commission under the UPA-1 regime Montek Singh Ahluwalia has said that the economic growth was faster than the global economic growth between 2003-2007, the last year of the Atal Bihari Vajpayee government and first four years of the Manmohan Singh government.

In an interview with CNBC-TV18, Montek Singh Ahluwalia also admitted that the Manmohan Singh government could have managed fiscal deficit in a better manner post the global financial meltdown in 2018-09. “The UPA government could have tried reigning in the fiscal deficit in a better manner post the global financial crisis,” he told the news channel. He also admitted that inflation had become a big problem during UPA-II.

Back series data calculated by National Statistical Commission-appointed sub-committee on the basis of new base year 2011-12 showed that India clocked 10% plus growth in two years of the UPA regime. The data also showed that India first achieved an 8% growth in the FY03-04.

Montek Singh Ahluwalia also said that India needs to deal with the problem of non-performing assets, which was identified by Raghuram Rajan in 2014. He said that fixing banks is the most critical step in getting to a higher GDP growth.

Meanwhile, government’s Principal Economic Advisor Sanjeev Sanyal said that the back series data by the committee is not official and that the high growth began during NDA-1. He told ET Now that the external conditions and reforms started under the Vajpayee government aided high growth in the 2000s. He blamed the UPA government of irresponsible credit expansion and said that it could have initiated the clean-up of the economy.

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