The Aryavarth Express
Agency(New Delhi): In a recent revelation on March 15, 2024, Arvind Subramanian, the previous chief economic adviser, expressed perplexity over the latest Gross Domestic Product (GDP) figures of India, describing them as ‘absolutely mystifying’ and challenging to understand. During the last quarter of 2023, India’s economy expanded by an unexpected 8.4%, marking the most rapid growth in 18 months. Subramanian shared his thoughts at the India Today conclave, stating, “I must be candid that the recent GDP figures are beyond my grasp. With all due respect, they are enigmatic and seem to not align. Their significance is unclear to me.”
The National Statistical Office (NSO) has adjusted the GDP growth estimates for the first and second quarters of the financial year, raising them to 8.2% and 8.1% from their initial 7.8% and 7.6%. Subramanian elaborated on the discrepancy, noting that while the suggested inflation within these statistics ranges from 1 to 1.5%, the actual inflation rate in the economy varies between 3 and 5%. He observed, “Despite the economy expanding at a rate of 7.5%, private consumption remains at 3%.”
Further analysis by Subramanian revealed that the unexplained errors and omissions in the recent data, which constitute approximately 4.3 percentage points of the projected 7.6% growth for the fiscal year 2024, are significant. “There’s much about these figures that baffles me. I’m not asserting they’re incorrect, but that is for others to decide,” he remarked.
Subramanian also commented on the investment climate, stating that despite the prevailing notion that the Indian economy has improved as an investment destination in recent times, the reality reflects a substantial decline. He pointed out, “It’s evident that foreign direct investment has significantly decreased.”
The ex-chief economic adviser raised a critical question regarding the attractiveness of India as an investment hub, given the stark reduction in foreign direct investment. “If India is indeed becoming a more appealing location for investment, why aren’t we seeing an increase in foreign direct investment?” he inquired. Subramanian also noted that private and corporate investment levels are currently below what they were in 2016, underscoring a concerning trend in the economic landscape.