New Delhi: Ridiculing the official back-series estimates for India’s GDP as a “puzzle”, former Union Finance Minister P Chidambaram on Friday wondered how growth during the Narendra Modi government is pegged higher when all other economic parameters pointed downwards.
Participating in an interactive programme “Is India Being Redefined” here, the Congress veteran also questioned why former Chief Economic Adviser Arvind Subramanian kept a studied silence on demonetisation, which Chidambaram said was an “utterly foolish decision”.
“Even after this redefinition, the pattern of growth and decline remain exactly the same just that entire curve has moved down a jot. The pattern is the best years of India’s growth were 2004 to 2014. They cannot erase the fact.
“If the GDP growth in last 4 years is better than UPA years, then why is investment down by almost 5-6 percentage points,” asked Chidambaram.
“Why our exports not crossing 315 billion USD mark registered in March 2014? Why is credit growth sluggish and credit growth to industry barely 1.4 per cent. Why no jobs, why so much farm distress and maximum number of farmers suicides in the last 4 years,” he said about the back-series estimates for India’s GDP released on Wednesday.
The new estimates put the average growth during the UPA regime down from previous estimates while growth during the NDA period is pegged higher than during UPA.
“If every other indicator points towards south how is your GDP alone pointing north? When every indicator is pointing down, how can the GDP go up. This puzzle has to be solved by somebody, may be the NITI Aayog can,” he said.
He also questioned why the new estimates left out the 2004-05- the first year of the UPA regime as well as the six years of the Atal Bihari Vajpayee-led NDA government.
Talking about demonetisation, he said there was a consensus about Modi’s November 8, 2016 decision to be “utterly foolish that set us back by almost 1.5 per cent of GDP and setback growth for two years”.
“Before the economy could recover from the shock of demonetisation, we had the utmost inefficient implementation of the GST,” said Chidambaram adding that “everything about the GST was wrong except the idea”.
He also lambasted Subramanian for keeping silent on demonetisation.
“Why even a brilliant economist like Subramanian was unwilling to speak up when he was in office. He owes nothing to this government… he had a regular job with a prestigious institute,” said Chidambaram about the former Chief Economic Adviser who has now described the note ban as a massive, draconian, monetary shock that accelerated economic slide to 6.8 per cent in the seven quarters after the decision against the 8 per cent recorded prior to it.
“What is the kind of fear that this government has instilled in people that nobody wants to speak up that is the sad part.
“People who are knowledgeable, learned, scholars, academics and thinking people, when they refuse to speak, what will happen is quacks will decide what our economics will be,” added Chidambaram.