Blast From the Past: Modi, Opponents Spar Over Decade-Old GDP
(Bloomberg) -- How fast did India’s economy expand 11 years ago? It’s a question that has kicked up a political row in the country.
Prime Minister Narendra Modi’s team spent the weekend underplaying a panel’s estimates that showed gross domestic product grew 10.08 percent in the financial year ended March 2007 under the then government led by the Congress party. That pace is the fastest on record and undermines Modi’s narrative of steering India to now make it the fastest-growing major economy in the world.
Opposition parties have latched on to the July 15 report of the National Statistical Commission -- an autonomous body mandated to evolve policies, priorities and standards in statistical matters. A table toward the end of the 178-page ‘Report of the Committee on real Sector Statistics’ shows the economy expanded at a record pace should one apply the new GDP methodology to data of past years.
Read: India Ministry Says Stats Panel GDP Estimates Not Official
Former finance minister P. Chidambaram on Sunday said the numbers set the record straight that the Congress party-led government delivered higher growth rates than the current administration.
The government says there’s nothing official about the report. The recommendations will be examined to decide the appropriate methodology to be adopted for generating the back series, the statistics ministry said.
Federal minister Arun Jaitley has defended the data, saying the Congress-led government merely reaped the benefits of policies laid down by the previous Bharatiya Janata Party government.
Modi’s policies, though disruptive in the short-term, have received endorsements from international agencies, including the International Monetary Fund and Moody’s Investors Service. Still, there’s criticism that growth under Modi hasn’t been accompanied by job creation, and the report on GDP growth of past years has only added to the controversy.
Soumya Kanti Ghosh, an economist with the State Bank of India, finds the buzz intriguing.
“Nevertheless, some trends do emerge from the back-casted series that merits attention for policy makers,” Ghosh said. “It is important that we should keep pushing our structural reforms and macro economic prudence so that we continue to expand at a healthy rate even if external conditions turn adverse.”
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