Now, PMEAC jumps into defense of GDP data after Arvind Subramanian stirs hornet’s nest on growth

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Updated: June 12, 2019 4:25:36 PM

Defending the official growth estimates, the economic advisory council to the Prime Minister (PMEAC) argued that Arvind Subramanian’s GDP paper uses ‘most unusual exercise’.

Arvind Subramanian had quit in June 2018 from the position of chief economic advisor.

Defending the official growth estimates, economic advisory council to the Prime Minister (PMEAC) argued that Arvind Subramanian’s GDP paper uses ‘most unusual exercise’ to calculate data, TV news channels reported. The research published by the former chief economic advisor (CEA) involves proxy indicators used that can be questioned, it also said, adding that it would rebut the paper in due course. It’s wrong to imply that expert views was not taken for the new GDP, the council noted. The research estimates would be examined in detail, it added.

“At the moment, it is felt that any attempt to sensationalize what should be a proper academic debate is not desirable from the point of view of preserving the independence and quality of India’s statistical systems, all of which the former CEA is familiar with,” news agency PTI reported it as saying.

In his latest research paper which was published at Harvard University, Arvind Subramanian had concluded that concluded that India’s rate of growth has been overestimated under both the UPA and the NDA governments. He had also said that an overestimation is of about 2.5 per cent and the actual growth may be lower, at nearly 4.5 per cent, down from 7 per cent between FY12 and FY17. The estimates by the noted economist are based on an analysis of 17 key economic indicators correlated with the growth rate. “The results in the paper suggest that the heady narrative of a guns-blazing India must cede to a more realistic one of an economy growing solidly but not spectacularly,” he had said in the paper.

Also read: Arvind Subramanian’s GDP bombshell: Prominent economists divided over maths

The government had rejected the estimates of the research paper saying that the methodology for computation was discussed in detail by the Advisory Committee on National Accounts Statistics (ACNAS). The committee had comprised experts from academia, National Statistical Commission, Indian Statistical Institute (ISI), Reserve Bank of India (RBI), Ministries of Finance, Corporate Affairs, Agriculture, NITI Aayog and selected State Governments, it had also said. The Ministry of Statistics and Programme Implementation (MoSPI) said the growth projections by several national and international agencies are broadly in line with the estimates released by it. Arvind Subramanian had quit in June 2018 from the position of chief economic advisor.

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