New Delhi: Calling economic growth during the UPA regime as "pretty decent", the government's principal economic advisor on Thursday said the real problem in the Congress-led rule was macro instability caused by spiralling inflation, high fiscal deficit, widening CAD and issues with lending.
Defending the revision in GDP growth rates for most of the 10-year UPA rule, Sanjeev Sanyal, Principal Economic Advisor in the Ministry of Finance, said the basis for the revision was use of internationally accepted standards.
"From time to time GDP series is revised. You take a base year and then calculate it. This reflects that the structure of the economy changes from time to time. We have taken 2011-12 as base year and we have calculated and now we have created a back series as well.
"The further you go away from the base period, you can go back to 1950 also, it will give worse reflection of time that is why it was decided, for whatever reason you can ask the CSO, that 2004-05 was a good period from where you can create a back series," he said.
The revised numbers show India's economic growth rate averaged 6.7 percent during the Congress-led UPA regime as compared to 7.3 percent under the present government. Previous numbers had put the average growth rate during the 10-year UPA rule at 7.75 percent.
"One important thing, there is no need to get politically hot-headed about the matter for a very simple reason that this is a technical issue using internationally accepted standards," he said.
Replying to the criticism heaped by opposition Congress to the move, he said growth rate was not the real problem in the UPA era.
"Even in the new series although the GDP rate is lower than the old series but they are still pretty decent. The real issue for that period was not the growth rate. The real problem was that it was based on macro instability. You had spiralling inflation, you had high fiscal deficits of 5-6 percent, widening current account deficit (CAD) and serious problems with lending," he said.
Sanyal said for 2012-13, the growth was revised from 4.7 percent in old series to 5.1 percent in the new series and further to 5.5 percent. In 2013-14 the growth rate was revised from 5 percent to 6.9 percent in new series. "But since the base had increased, it was revised to 6.4 percent, which shows a massive increase in estimations from 5 percent.
"The largest downward revision in the numbers has been from 10.3 percent to 8.5 percent, which is 1.8 percent. But, if you look at the revision up, in 2013-14 it was 1.4 percent. It is using the same scale, it is not that only revision downward has happened, in some years it is upwards also. You cannot accept a framework when it suits you and not accept it when you apply backwards," he said.
Sanyal said the new series was accepted by the opposition as an improvement over the old series data in 2015 because the GDP numbers for 2012-13 and 2013-14 fiscal were revised upwards at that time.
Former Finance Minister P Chidambaram had on 3 February, 2015 said "the new data successfully establishes the fact that UPA succeeded to revive the economy. The revised GDP data will end misconceived charges that UPA mismanaged the economy".
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Updated Date: Nov 29, 2018 19:18:22 IST