Rajan raises doubts over India growing at 7%

New Delhi, March 26

Former RBI Governor Raghuram Rajan today expressed doubts over Indian economy growing at 7% when not enough jobs were being created and said the current cloud over the GDP numbers must be cleared by appointing an impartial body to look at the data.

Rajan, who has also served as chief economist at the International Monetary Fund (IMF), said he had no idea what statistics are pointing at currently and “a revamp” was needed “to really figure out what India’s true growth rate is”.

“I know one minister (in the Narendra Modi government) has said (that) how can we be growing at 7% and not have jobs. Well, one possibility is that we are not growing at 7%,” he told a news channel. He did not name the minister.

Finance Minister Arun Jaitley has been stoutly defending the growth data saying an economy cannot be growing at 7-8% without creating jobs. He has also stated that no major social agitation indicates it hasn’t been jobless growth.

Rajan, who was RBI Governor between September 2013 and September 2016, said a stronger broad-based growth is needed that creates more jobs.

On doubts being raised by some over economic data after revision in growth rate, he said a clean-up act is needed and an impartial body appointed to look at the numbers.

“I just think that we need now to essentially clean up, find out what in fact is the source of confusion with the new GDP numbers, with the revisions etc. I would say setting up an impartial body to look at it is an important step to resorting confidence,” he said.

The impartial body may throwback the same numbers but “we absolutely need better confidence in our GDP numbers now given the back and forth we have had”.

In November 2018, the Central Statistics Office (CSO) lowered the GDP growth for previous Congress-led UPA by recalibrating national accounts. After this, the four years of the current government showed higher average growth than that achieved during the UPA.

Last month, the government revised the economic growth rate upwards to 7.2% for 2017-18 from 6.7% estimated earlier.Questions have been raised about the government not making public the NSSO labour survey that reportedly put unemployment rate in 2017 at a 45-year high.

Earlier this month, a group of 108 economists and social scientists said that lately, the Indian statistics and the institutions associated with it have, however, come under a cloud for being influenced and indeed even controlled by political considerations.

“In fact, any statistics that cast an iota of doubt on the achievement of the government seem to get revised or suppressed on the basis of some questionable methodology,” the group had said in a statement.

Jaitley had countered them saying 70% of them were compulsive contrarians, a term he had coined to thrash opponents of Prime Minster Narendra Modi-led government earlier.

Rajan, who is on a tour to promote his new book ‘The Third Pillar’, said a broad-based growth that creates meaningful jobs for people was needed. — PTI