NITI Aayog vice-chairman Arvind Panagariya on Sunday categorically rejected all criticism of the upward revision of India’s GDP estimates for 2013-14 and 2012-13 by the Central Statistics Office (CSO).
“Fiscal years 1988-89 to 1990-91 were quite fragile from a macroeconomic perspective, as the 1991 crisis testifies… yet the average growth rate during these years, based on the old series, was 7.5 per cent,” Dr. Panagariya told The Hindu .
‘Has our mind become conditioned?’
In January, the CSO released >revised estimates for India’s GDP using a new base year, which economists and commentators around the world, including Chief Economic Adviser Arvind Subramanian and Reserve Bank of India Governor Raghuram Rajan have expressed discomfort about.
According to the revised estimates, growth in 2013-14 was 6.9 per cent against 4.7 in the old series. Similarly, growth in 2012-13 was 5.1 per cent against 4.5 per cent.
‘Puzzling’
The picture of the state of the economy these revised estimates from the CSO depict is at odds with the other macroeconomic trends for the two years, the Reserve Bank said. Dr. Subramanian has said that he finds the revised estimates “puzzling.” NITI Aayog Vice-Chairman Arvind Panagariya, however, said investment as a proportion of the GDP had remained in the 29-30 per cent range even going by the old series, which, he said, was “rather difficult to reconcile with sub-5 per cent growth.”
“Or, is it that having accepted such massive slowdown produced by the old series for some time, our mind has become conditioned not to believe anything that challenges that belief … After all, the new series also shows substantial slowdown relative to 2009-10 and 2010-11; only that the slowdown is less than what the old series had shown!,” he said.
