During the recent G20 summit in Delhi, billboards showcasing India's impressive GDP growth figures stood prominently. However, a closer look reveals a different reality beneath the surface.
Ashoka Mody, a visiting professor of international economic policy at Princeton University, contends that India's reported 7.8% GDP growth for the second quarter of this year is misleading. According to Mody, while the official statistics present India as the world's fastest-growing major economy, significant challenges such as rising inequalities and job scarcity are being overlooked.
Behind the glossy advertisements promoting the summit, residents from Delhi's slums face eviction as their roadside stalls and shops are demolished. This 'branding and beautification' effort aims to portray a rising India, but it conceals the human struggles occurring on a massive scale.
Mody points out discrepancies in the GDP calculations by the Indian National Statistical Office (NSO). While income from production increased at an annual rate of 7.8%, expenditure only rose by 1.4%. This significant difference suggests that the actual economic performance may be weaker than reported. The NSO's approach of prioritizing income over expenditure goes against international best practices, potentially obscuring the true state of the economy.
Drawing comparisons to other countries, Mody notes that nations like Australia, Germany, and the UK adjust their GDP figures by considering both income and expenditure. The United States, for example, uses a composite measure that averages both metrics, which, when applied to India's data, reduces the growth rate from 7.8% to 4.5%. This adjusted figure reflects a more accurate picture of India's economic health, especially in light of the limited appetite from foreign markets and the ongoing struggles faced by many Indians.
Mody's critique highlights the importance of transparent and comprehensive economic reporting. By acknowledging both income and expenditure, a more balanced and realistic assessment of India's economy can be achieved, ensuring that growth figures do not mask underlying social and economic issues.
Reference(s):
cgtn.com
