Amid a raging controversy over the revised economic growth numbers, former chief economic adviser Arvind Subramanian has called for an investigation by experts to clear doubts and build confidence while noting that the “puzzle” about the data needs to be explained.
He stressed that institutions that do not have technical expertise in calculating the GDP data should not be involved in the process, apparently referring to the Niti Aayog.
Subramanian, who criticised demonetisation in his new book, titled Of Counsel: The Challenges of the Modi-Jaitley Economy, was, however, evasive when asked if he was consulted in the decision-making process on note ban.
“As an economist, I think there are some puzzles (new back series GDP data) there are some issues that need to be explained. As there are things that need to be explained, we should, just to create confidence and eliminate any uncertainty or doubts, I think we should have experts who can investigate this thoroughly and give their answers,” Subramanian told PTI in an interview.
On the controversy over the Niti Aayog’s presence at the release of the GDP back series data by the Central Statistics Office (CSO) last month, he said experts should have the main job of producing and explaining data.
“I think this (calculation of GDP) is a very technical task and technical experts should do the task, institutions that don’t have technical expertise should not be involved in this,” he said.
Recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the CSO last month lowered the country’s economic growth rate during the previous Congress-led UPA’s regime.
Asked whether he was consulted in the decision-making process on demonetisation, the former CEA said, “In the book, I said that this is not a Kiss and Tell memoir, that is for gossip columnists.”
Referring to criticism that he did not speak on demonetisation when he was working for the government, Subramanian said, “People will say whatever they say, right. But through my new book, I was drawing attention to the puzzle, 86 per cent reduction in cash (after demonetisation) and yet the impact on the economy was much less.”
Slowdown warning
Subramanian warned that the Indian economy was in for a slowdown for some time as agriculture and financial system were under stress.
“We have to brace ourselves for a slowdown for some time. I say that for a combination of reasons. First of all, the financial system is under stress. This is not conducive for rapid growth... The agriculture sector remains under stress,” he said.