IMF Concerns Justified – India’s GDP Calculation Less Than Reliable: Profs. Arun Kumar & Pronab Sen

IMF concerns justified - India's GDP calculation less than reliable: Prof. Arun Kumar and Prof. Pronab Sen in an interview to Karan Thapar for The Wire. .......................................... In two parallel interviews, presented as one package, to discuss the IMF’s decision to give India’s national accounts statistics, which include key figures such as GDP and GVA, a C grade, which is the second lowest grade, both Prof. Arun Kumar, a former Professor of Economics at Jawaharlal Nehru University, and Prof. Pronab Sen, India’s former Chief Statistician, have said that India’s GDP is less than reliable. They say the problem arises from the way India estimates the unorganized sector which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the organized sector as a proxy to estimate the performance of the unorganized sector. But if the two sectors are moving in opposite directions, as happened after demonetization, GST and the pandemic, you could end up either overestimating or underestimating the unorganized sector. Prof. Arun Kumar says he believes India’s actual GDP is probably 48% of what the official figure claims it to be. He also finds it very difficult to accept the 8.2% GDP growth figure released yesterday for Quarter 2. Prof. Pronab Sen said he has reservations about the 8.2% growth figure for GDP in Quarter 2 which was officially released yesterday. He suggested that if nominal GDP is 8.7% it is hard to accept that inflation is only 0.5%, though he agrees inflation is low. I will stop there. You should hear these interviews for yourself to understand both Prof. Kumar’s and Prof. Sen’s responses to the IMF criticism of India’s national accounts statistics and whether either of them sees the situation improving in the years to come. Join The Wire's Youtube Membership and get exclusive content, member-only emojis, live interaction with The Wire's founders, editors and reporters and much more. Memberships to The Wire Crew start at Rs 89/month.    / @thewirenews