Moneycontrol
Feb 18, 2016 12:06 PM IST | Source: PTI

Modi encouraging financial jugglery: Cong on GDP projections

"With there being low production and capital utilisation in many sectors, we have to wonder the veracity of this (official economic) data. India was always known for having credible statistics prior to the arrival of Modi government.


Congress cast doubts over official projections that GDP would grow at 7.6 percent during the current fiscal and alleged that Prime Minister Narendra Modi was "encouraging financial jugglery".


"With there being low production and capital utilisation in many sectors, we have to wonder the veracity of this (official economic) data. India was always known for having credible statistics prior to the arrival of Modi government.


"But, Modi government is obsessed with its image. In his quest to mask his failures in trying to fulfil the audacious promises he made, Modi is encouraging financial jugglery to maintain some semblance of credibility," the party said.


In a commentary "Modi Govt's new GDP projections raise more questions than they answer", it said that with this being a drought year, there being extreme rural distress, exports down, and job growth stagnant, many experts have questioned the nature of this data.


"The methodology for the calculation has been questioned by many, including RBI Governor Raghuram Rajan. The RBI said that for the first time the GDP is growing lower in nominal terms than real terms," the party said in the commentary posted on its website.


Besides, the Congress said that many have also questioned the GDP deflator, which has given a confusing picture from quarter to quarter.


"The GDP at 'constant prices' grew at 1.3 percent more than the 'current prices' in Q2 of FY2016, but in Q3 of FY2016, it grew 1.9 percent less. This 3.2 percent difference has baffled many observers, raising more questions than answers on the GDP numbers," it said.


Besides, it underlined that agriculture grew at 1.1 percent, jobs have not been growing, exports are still languishing, the IIP shows a negative growth. "Yet we are told that the economy is on the road to recovery." Gross Capital Formation for FY2016 is at 29.4 percent of the GDP, down from 30.8 percent in FY2015, which casts further doubts on the claimed recovery, it added.


At the outset, the Congress said the Modi government continues to "confound" economic experts with their official economic data.

The most recent release from the Central Statistical Office said the GDP will grow at 7.6 percent for the current fiscal year.

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