GDP is stats, rupee falling is reality: Chidambaram

Economic adviser disagrees with former FM

Bengaluru, Sept. 1: Former Finance Minister and senior Congress leader P. Chidambaram on Saturday took a jibe at the Narendra Modi-led government at the Centre over the continuous weakening of the Indian currency with respect to the US dollar. Taking to Twitter, Mr Chidambaram said, “Q1 GDP at 8.2 per cent is a statistic. Rupee at 70 to a dollar is a reality. In Delhi, Diesel at `70.21 and Petrol at `78.52, is a cruel blow.”

He was responding to the GDP data released by the Centre on Friday. “Going forward, the base effect will not be so favourable. And when we reach Q3 and Q4, the rate of growth may decline and the annual growth rate may be more or less like last year’s,”

Mr Chidambaram, however, expressed happiness at the quickened rate of growth recorded in the first quarter of current fiscal. “Happy that the rate of growth has quickened, but look at the table once again. Q1 growth rate is based on the lowest base (5.6) in the last 8 quarters,” he tweeted.

Responding to his scepticism, the principal economic adviser in the ministry of finance, Sanjeev Sanyal on Saturday said that the growth rate will be affected in the next reading, but India would remain world’s fastest growing major economy.

India’s economy grew at 8.2 per cent in the AprilJune quarter of 2018-19 on strong performance of manufacturing and agriculture sectors, increasing its lead over China to remain the world’s fastest growing major economy, according to government data released on Friday.

“The year-on-year growth rate will be affected by the rise in the base in the next reading, but will still be a very strong number and India will remain the world’s fastest growing major economy,” said Mr Sanyal.

Further countering Mr Chidambaram’s comments, former Infosys CFO and veteran IT investor M.D. Mohandas Pai said, “Consumption is increasing due to increase in income, low inflation, corporate Capex is going up. So, the base impact will be moderated by higher growth than estimated. Growth will be higher than last year,” he said. Chidambaram is underestimating the growth, which is natural being in the opposition, Mr Pai said.

Q1 GDP at 8.2 per cent is a statistic. Rupee at 70 to a dollar is a reality. In Delhi, Diesel at `70.21 and Petrol at `78.52, is a cruel blow. — P. Chidambaram, Congress leader