‘India can push growth close to 9%’: Panagariaya dares critics to point out faults in GDP calculations

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India can realistically push its economic growth close to 9 per cent from the current 7 per cent or so, by implementing a few more reforms in the next five years, Chairman of the 16th Finance Commission Arvind Panagariya said on Wednesday. 

Panagariya, who served as Niti Aayog’s Vice Chairman from January 2015 to August 2017, said Prime Minister Narendra Modi worked hard over the past 10 years to make India a friendly place for businesses, so investment is coming in. He said the economy is open and in the next 2-3 decades, India can sustain a very rapid growth. 

In the third quarter of FY24, the Indian economy grew at 8.4 per cent, beating all expectations. However, noted economists Raghuram Rajan and Arvind Subramanian have raised questions over the country’s economic growth. While Rajan said India should not make the mistake of believing the hype of its economic growth, Subramanian said the latest gross domestic product (GDP) numbers are ‘absolutely mystifying’.

Panagariya said India is currently growing in real rupees at about 7 per cent or so per year. “Certainly with a few more reforms in the next five years, we can realistically push it to close to 9 per cent, certainly somewhere at 8-9 per cent and that can be sustained easily for a couple of decades,” the economist said while speaking at the Times Now Summit.  

The former Niti Aayog VC also responded to Subramanian’s ‘mystifying’ comment and said: “If you are mystified, then first you have to check, (whether) mist is on your own glasses…or somewhere else.” 

Panagariya said the methodological change for calculating GDP during the Modi government was recommended by bodies appointed by the previous administration (UPA government). “Nobody has questioned the integrity of those who actually do these (GDP) numbers. This is a new kind of phenomenon, which I don’t understand,” he said. 

The economist said that if critics are saying there is some fault with the methodology of calculating GDP, “they have to come in and point out the fault so that we can talk about how to make the improvements”. 

Subramanian, who served as the chief economic advisor from October 2014 to June 2018, had recently said India’s latest GDP numbers are “absolutely mystifying” and difficult to comprehend.

“I want to be honest with you that the latest GDP numbers, I just simply can not understand them. I say that with genuine respect and things. They are absolutely mystifying. They don’t add up. I don’t know what they mean,” Subramanian said while speaking at India Today Conclave 2024.

(With inputs from PTI)

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