The Aryavarth Express
Agency(New Delhi): On Friday, the Congress party expressed skepticism over the recent GDP growth figures, asserting that an economic expansion driven by an increase in net taxes, amidst weakening consumer spending, is neither ideal nor enduring, and signals potential challenges for the nation’s future economic trajectory.
In a statement on X, Congress spokesperson Jairam Ramesh critiqued the latest GDP growth numbers, mocking the ruling BJP’s narrative of an ‘India Sparkling’ as propagated by their lead propagandist, dubbed ‘FekuMaster’. “Growth fueled by a surge in net taxes, against a backdrop of faltering consumption, lacks desirability and sustainability, casting shadows over our prospects for medium-term economic advancement,” he commented.
Ramesh continued, highlighting the discrepancy after India announced an 8.4 percent GDP increase in this fiscal year’s third quarter. He explained the distinction between GDP and Gross Value Added (GVA), emphasizing that economists prefer GVA as a more accurate measure of economic activity. “While GVA expanded by only 6.5 percent, a 1.9 percent uplift in net taxes has inflated the GDP growth figure to 8.4 percent. This rise in net taxes isn’t due to enhanced revenue collection—a positive outcome—but rather due to reduced subsidies for the majority of Indians,” he elaborated.
He pointed out that private consumption, the expenditure by average individuals on goods and services, forms the cornerstone of GDP. “The forecast for growth in private consumption expenditure in FY24 is pegged at 3 percent, marking the slowest pace in two decades. This, combined with other indicators, suggests ongoing economic strain for the common populace, with minimal year-over-year consumption growth and diminishing government subsidy support,” Ramesh stated.
The Congress leader also made a comparative assessment of economic growth rates under different administrations. “Despite these GDP figures, growth has substantially slowed under the Modi government compared to the UPA era. We witnessed an average annual GDP growth of 7.5 percent during the UPA’s tenure, versus 5.8 percent under Modi’s leadership,” he observed.
“Furthermore, the average GDP growth rate during Modi 2.0 has been a mere 4.3 percent, the lowest in over three decades,” he claimed. Despite these critiques, India’s economy expanded by a surprising 8.4 percent in the last quarter of 2023, marking the fastest growth in eighteen months and bolstering Prime Minister Narendra Modi’s reputation for achieving top-tier growth rates as the general elections approach. This growth rate outpaces the projections by both the IMF and the World Bank, setting a positive outlook for the fiscal year 2023-24.