'GDP numbers are mysterious, don't add up': Former CEA Arvind Subramanian

New Delhi: Former Chief Economic Adviser Arvind Subramanian on Friday (March 15) said India's latest GDP numbers were 'absolutely mysterious' and difficult to understand.

Speaking at the India Today conference, Subramanian said, “I cannot understand the latest GDP numbers, they are mysterious and do not add up. For example, implied inflation numbers issued by the government are between 1-1.5%, but actual inflation is around 3-5%.

He also pointed out that while the economy is growing at 7.5%, private consumption is lagging behind at 3%.

In the latest data, Subramanian said, the estimated 7.6% growth for FY24 was actually 4.3 percentage points due to unaccounted errors and omissions.

Subramanian served as Chief Economic Adviser from October 2014 to June 2018.

He also flagged that foreign direct investment (FDI) has come down sharply in the last two to three quarters, according to the report.

“Not only is India's FDI declining, India's share of global FDI to emerging markets has also declined. So, the question is, if India has become an attractive place to invest, why is there not more FDI? Corporate investment is also lower than in 2016,” he said.

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Economy of India grew up 8.4% in the October-December quarter of fiscal 2024 – the fastest pace in over a year and a half.

The NSO revised its GDP estimates for the first and second quarters of this fiscal to 8.2% and 8.1% from 7.8% and 7.6% respectively.

While Subramanian expressed concern over the latest GDP numbers, former Chief Statistician of India Pranab Sen, said Karan Thapar said Q1 GDP growth of 7.8% appears to be an overestimate. He said 6.5% was accurate.

He said the GDP growth figure shows only a fraction of the economy. They do not exhibit high levels of unemployment.

As stated therein Periodic Labor Force Survey (PLFS) data From July 2022 to June 2023, a significant number of individuals in India were engaged in self-employment or unpaid labour.