Former CEA Arvind Subramanian has said methodological changes led to overestimating GDP growth by 2.5 percentage points per year between 2011-12 & 2016-17.
In a working paper, Arvind Subramanian finds India may have grown at an average of only around 4.5% between FY12 and FY17 as against official estimates of 6.9%.
The paper adds to ongoing debate on transfer of excess RBI reserves to the govt that has been a major bone of contention between the two parties this year.
Former CEA Arvind Subramanian says RBI autonomy critical but it’s also important to hold it accountable as there have been lapses like in case of IL&FS.
In his upcoming book, former chief economic adviser Arvind Subramanian talks about his suggestion to redeploy RBI’s excess capital and the roadblocks it faced.
While global corporations setting up GCCs in India continue to express confidence in availability of skilled AI engineers, the panel argued that India’s real challenge lies elsewhere.
Without a Congress revival, there can be no challenge to the BJP pan-nationally. Modi’s party is growing, and almost entirely at the cost of the Congress.
Arvind has estimated proxy for GDP based on data of 17 transactional variables. Not to be surprised, he is getting different(lower) ‘GDP’ estimates. The issue really is which methodology should one adopt? Since the revised methodology worked on during UPA and NDA times is an accepted international methodology, we need to review it or we may supplement it with transactional or expenditure based GDP estimates. In any case, the issue is wide open. So long as it is not politicised as UPA versus NDA, it is fine. As regards Arvind’s observation that had it been known that growth rates are lower than published, Jaitley could worked on banking or agriculture reforms, is bizzare. These reforms were pending for years and should have been taken up immediately after his first budget. In fact, failure of Jaitley is precisely this. Modi relied heavily on Jaitley for economic affairs and he indeed let him down. Hope Modi gets this right in his second term.
Think of the two pilots who fly an A 380 or a 747. Thousands of pieces of data flashing before their eyes. The economic team does not have the same precision at work before it, but what it does share with them is the good judgment that comes from having flown tens of thousands of hours, some of it through scary weather and storms. 2. Meaning no disrespect, but the former CEA is being a little economical with the truth. If he did not know – and understand with far greater sophistication than the rest of us possess, basing our assessments on anecdotal evidence, apart from lived experiences – that the economy was stumbling, all the more after demonetisation – he was of use to the government only for the pretty, well annotated Economic Survey he brought out. 3. One sees no contradiction – beyond a healthy creative tension – between world class economists like Dr Rajan, mandarins in the Ministry of Finance – among the brightest members of the civil service , as is the case all over the world – and the political executive which understands the development imperatives of a largely poor / lower middle class country. They have all the information they need to craft sound economic policies. They also have access to the collective wisdom and advice of the business community, spanning the expanse from India Inc to small traders and businessmen who have always supported the ruling party.
There is merrit existing beyond bureaucracy and it is a good idea to tap it.
Arvind has estimated proxy for GDP based on data of 17 transactional variables. Not to be surprised, he is getting different(lower) ‘GDP’ estimates. The issue really is which methodology should one adopt? Since the revised methodology worked on during UPA and NDA times is an accepted international methodology, we need to review it or we may supplement it with transactional or expenditure based GDP estimates. In any case, the issue is wide open. So long as it is not politicised as UPA versus NDA, it is fine. As regards Arvind’s observation that had it been known that growth rates are lower than published, Jaitley could worked on banking or agriculture reforms, is bizzare. These reforms were pending for years and should have been taken up immediately after his first budget. In fact, failure of Jaitley is precisely this. Modi relied heavily on Jaitley for economic affairs and he indeed let him down. Hope Modi gets this right in his second term.
Think of the two pilots who fly an A 380 or a 747. Thousands of pieces of data flashing before their eyes. The economic team does not have the same precision at work before it, but what it does share with them is the good judgment that comes from having flown tens of thousands of hours, some of it through scary weather and storms. 2. Meaning no disrespect, but the former CEA is being a little economical with the truth. If he did not know – and understand with far greater sophistication than the rest of us possess, basing our assessments on anecdotal evidence, apart from lived experiences – that the economy was stumbling, all the more after demonetisation – he was of use to the government only for the pretty, well annotated Economic Survey he brought out. 3. One sees no contradiction – beyond a healthy creative tension – between world class economists like Dr Rajan, mandarins in the Ministry of Finance – among the brightest members of the civil service , as is the case all over the world – and the political executive which understands the development imperatives of a largely poor / lower middle class country. They have all the information they need to craft sound economic policies. They also have access to the collective wisdom and advice of the business community, spanning the expanse from India Inc to small traders and businessmen who have always supported the ruling party.