Why India’s growth figures are off the mark – By Arun Kumar
During the global financial crisis, it was said that the experts were behind the curve. The International Monetary Fund (IMF) and financial sector experts continued to predict till October 2008 that the global economy would grow rather than shrink. They were way off the mark since the global economy was rapidly slipping into a great recession.
Is India facing a similar situation at present? The economic growth rate (quarterly) has been sliding for the last five quarters from 8% to 7% to 6.6% to 5.8% and now to 5%. Yet, experts have been talking of a 7% annual rate of growth; every quarter when the rate of growth has been announced, they have argued that things have bottomed out and that the rate would rise henceforth.…
In brief, the official data only represents the organised sector. To incorporate the unorganised sector, data from alternative sources need to be used. The decline in the workforce, the rise in the demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act, etc. suggests that the unorganised sector has declined by at least 10%.…
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