Former chief economic advisor Arvind Subramanian warned against celebrating India’s economic recovery, saying the economy was recovering from last year’s slump.
“GDP is barely back to pre-pandemic levels and the IIP (Industrial Production Index) is still below pre-pandemic levels. We are wrong, or we run the risk of misunderstanding the natural recovery after the big decline. It’s way too early to celebrate the numbers. They’re still pretty weak compared to pre-pandemic levels, “Subramanian said at a speech in honor of the late Subir Gokarn, Business Standard reported.
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He also said the government’s policy of increasing import tariffs and not signing international agreements will not help shift investors from China to India while harming exports.
“What I would say is that the recovery is still going on,” Subramanian said at the talk organized by the Indira Gandhi Institute of Development Research.
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Subramaian also said that from 2013-14 to 2018-19, normal or potential GDP growth was 4 percent, rather than the 7 percent shown by official data, and that a factual assessment of that period is required, it said Report.
He also said that India needs unskilled labor-intensive growth for inclusive growth, which is not the general thrust of production-based incentive systems (PLI).
“Both society and politicians in India are sensitive to high inflation. That makes it much easier for the central bank in India to counter the high inflation. I think this will be reflected in the policies of both the Center and the RBI, “he said, adding that he is” fairly optimistic “that in the medium term, policy will respond effectively to ensure that inflation and inflation expectations come down Don’t get out of hand.
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