New Delhi: Sunday brought with it despair for Indian cricket fans, but it also brought jubilation for a section of Indian businessmen, politicians, and social media enthusiasts who began celebrating the ‘news’ that India had become a $4 trillion economy.
The fact, however, is that even the government estimates that we are well short of that mark, predicting the size of the Indian economy would be about $3.6 trillion by 31 March, 2024, in nominal terms.
Even if India were to become a $4 trillion economy by 31 December, this would require near-10 percent quarterly growth in the two quarters spanning July-December, which is not only higher than what was seen in the first quarter, but also goes against the RBI’s prediction of a slowing economy.
What prompted jubilation over the size of the economy was a screenshot from a YouTube livestream of a ticker apparently showing changes in the sizes of major economies in real time. This ticker suggested that the Indian economy had just crossed the $4 trillion-mark.
Statisticians and government officials have since debunked the claims, saying such an analysis is statistically unsound.
The screenshot of the livestream was posted on X (formerly Twitter) by several Union ministers, including Minister of Jal Shakti Gajendra Singh Shekhawat, Minister for Culture, Tourism and Development of Northeast Region G. Kishan Reddy, and Minister of State (independent charge) for Law & Justice, Parliamentary Affairs and Culture Arjun Ram Meghwal.
India’s moment of global glory as our GDP crosses $4 Trillion.
The rise of #NewIndia under PM @narendramodi ji’s leadership is truly unparalleled.#GDP pic.twitter.com/NIV89GLNaj
— Gajendra Singh Shekhawat (@gssjodhpur) November 19, 2023
State level ministers and BJP functionaries including Maharashtra Deputy Chief Minister Devendra Fadnavis and D. Purandeswari, president of the party’s Andhra Pradesh unit, also shared the screenshot of the livestream on X. So did Gautam Adani, chairman of the Adani Group who reportedly cited the screenshot to congratulate the country.
This is what dynamic, visionary leadership looks like !
That’s what our #NewIndia progressing beautifully looks like !
Congratulations to my fellow Indians as our Nation crosses the $ 4 trillion GDP milestone!
More power to you, more respect to you Hon PM @narendramodi ji !… pic.twitter.com/wMgv3xTJXa— Devendra Fadnavis (@Dev_Fadnavis) November 19, 2023
Many of the social media posts, which attributed the ‘achievement’ to the leadership of Prime Minister Narendra Modi, have now been deleted. But neither the Ministry of Finance, which monitors the economy, nor the Ministry of Statistics and Programme Implementation, which produces the GDP data, has officially commented on the development.
ThePrint reached both ministries over email for a comment on, confirmation, or denial of the apparent achievement of the $4 trillion target but had not received a response by the time of publication. This report will be updated if and when a response is received.
Although a senior official in the Ministry of Finance told ThePrint on condition of anonymity that there was no substance to the claim that India was already a $4 trillion economy.
“What it looks like is that this (YouTube) channel has taken GDP data for one year, say, 2023, and the estimate for 2024 and calculated how much growth has to happen per second to reach that target,” the official explained.
“This has no statistical validity because it’s not as if the economy grows at a constant pace, or that the rupee-dollar exchange rate remains the same.”
The PIB Fact Check, the government’s fact-checking unit, is yet to take up the issue.
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‘GDP data doesn’t even come out monthly’
According to MoSPI data, the Indian economy was Rs 272.41 lakh crore in size as of 31 March, 2023, in nominal terms. This works out to about $3.31 trillion based on an exchange rate of Rs 82.86 to a dollar, the average exchange rate for the three months of January-March 2023.
The April-June 2023 quarter added another Rs 5.24 lakh crore to the size of the economy, also according to MoSPI, taking the total size to Rs 277.65 lakh crore, which is about $3.38 trillion.
Data for the July-September 2023 quarter will be released on 30 November.
The Budget 2023-24 documents show that the government has assumed a 10.5 percent nominal growth rate for financial year 2023-24, which would put India’s GDP at about Rs 301 lakh crore by 31 March, 2024. This works out to about $3.6 trillion.
Pronab Sen, chairman of the Standing Committee on Statistics, said that the very premise of the YouTube video, that GDP can be measured on a minute-by-minute basis, is flawed.
“The smallest time interval for which there is GDP data is one quarter, or three months,” said Sen, who served as the country’s first chief statistician, from 2007 till 2010.
“The data doesn’t even come out monthly, let alone on a minute-by-minute or second-by-second basis,” he added.
If the economy were to reach $4 trillion (Rs 333.3 lakh crore) in size by 31 December of this year, it would have to add Rs 55.66 lakh crore to its size by then.
Assuming the economy grows at the same rate over the next few quarters — which, historically, does not happen — this would mean India’s nominal growth rate would have to be 9.6 percent in both the second and third quarters.
This implies a significant acceleration would be needed in economic growth from the 8 percent nominal growth seen in the first quarter.
RBI Governor Shaktikanta Das, however, in his October monetary policy speech, predicted the economy would slow quite significantly each quarter till the end of the financial year.
(Edited by Amrtansh Arora)
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