Swamy has an unlikely ally in Joseph Stiglitz
Taking India's GDP into consideration American economist and Nobel laureate, Joseph Stiglitz said that, ''India should focus on "rapid rate economic growth" and not get "overly obsessed with inflation," which can then turn into greater problems like joblessness. This sits well with BJP leader, Subramanian Swamy who used similar argument to make his case for the discontinuation of the RBI governor, Raghuram Rajan.
India's growth rate for 2015-16 and 2016-17 projection
At the end of FY 2015-16, India's gross GDP was reported as 7.6%, making it the fastest growing large economy in the world. According to Central Statistics Office's (CSO) advance estimates for 2016-17, growth was pegged at 7.6% while Economic Survey projected a growth between 7-7.5%. IMF and World Bank too estimated a robust growth of 7.5% and 7.6% respectively, in 2016-17.
Raghuram Rajan on growth-inflation debate
Taking importance of inflation battle than growth into consideration Rajan said that, ''When people say inflation is low, you can now turn to stimulating growth", they really don't understand that these are two sides of the same coin. The RBI always sets the policy rate as low, consistent with meeting its inflation objective.'' As per RBI's primary objective, it cannot "abandon inflation for growth."
Rajan skeptical about India's GDP numbers
Joining the skeptics doubting India's GDP figures, Raghuram Rajan said, "there are problems with the way we count GDP, which is why we need to be careful sometimes just talking about growth". The new method to measure GDP is based on GVA (Gross Value Added).
Ruchir Sharma on India's growth and inflation
Morgan Stanley Chief global strategist Ruchir Sharma called India's GDP growth 'overstated'. Ruchir pointed out the prevailing situation of low private investment, and said that low sustainable inflation is linked to high level of investment. He said that no economy does well under high inflation. Giving examples of China, Korea and Taiwan, Ruchir said all of them grew when their inflation rates were low.
US report says India's growth may be overstated
The US State Department in its report titled 'Investment Climate Statements for 2016', said that India's 7.5% growth rate may be "overstated". It said that Modi government had been slow to match its rhetoric on economic reforms. Even as it appreciated government's measures to streamline bureaucratic decision-making and ease foreign investment, the report pointed out that 'depressed investor sentiment' suggests an overstatement of growth.
Subramanian Swamy tweets on US reports regarding India's growth
"Lutyen journos silent on US State Dept stating growth rate over-estimated and Stiglitz says growth more important than controlling inflation," Swamy tweeted.
