GDP controversy: Will give point-by-point rebuttal to Arvind Subramanian, says Centre
Subramanian had raised questions on the new methodology for measuring India's GDP.
Arvind Subramanian's recent research paper at Harvard has sparked controversy.
The Centre has said it would come out with a point-by-point rebuttal to former Chief Economic Advisor Arvind Subramanian's assertion that the new method of measuring India's economic activity overestimates the country's GDP between 2011 and 2017.
The government said the Economic Advisory Council (EAC) would examine in detail all the points Subramanian had made on India's GDP in a recent research paper at Harvard University, news agency ANI reported. It said the EAC would then address each point Subramanian raised in his research paper.
The government further noted that Subramanian must have raised these issues while he was still serving as Chief Economic Advisor in the first Modi government. It also said Subramanian had himself admitted that he has taken time to understand India's growth numbers, and is still unsure.
Subramanian said in his research paper that the new methodology for measuring India's GDP overestimated it by about 2.5 percentage points. "Official estimates place annual average GDP growth between 2011-12 and 2016-17 at about 7 per cent. We estimate that actual growth may have been about 4.5 per cent with a 95 per cent confidence interval of 3.5 - 5.5 per cent," he said in his research paper.
Confidence interval for my estimates go from 3.5% to 5.5 %. So, post-global financial crisis, growth in India, solid not stellar. Link to research paper: https://t.co/c2Eiah6Bxn. 2/n
— Arvind Subramanian (@arvindsubraman) June 10, 2019
He said the alleged miscalculation of the GDP figure had implications for economic policy making. "Macro-economic policy too tight. Impetus for reform possibly dented. Going forward, restoring growth must be highest priority, including to finance government's laudable inclusion agenda. GDP estimation must be revisited," Subramanian said in a tweet on Tuesday.
Implications: Macro-economic policy too tight. Impetus for reform possibly dented. Going forward, restoring growth must be highest priority, including to finance govt.'s laudable inclusion agenda. GDP estimation must be re-visited. n/n
— Arvind Subramanian (@arvindsubraman) June 10, 2019
Subramanian said his analysis was based upon 17 key economic indicators. His comments come even as controversy continues over the GDP numbers.