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GDP overestimation: PM’s panel to issue ‘point by point rebuttal’ to ex-CEA’s claim

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GDP overestimation: PM’s panel to issue ‘point by point rebuttal’ to ex-CEA’s claim

As was to be expected, the Economic Advisory Council (EAC) to the Prime Minister today (Wednesday, June 12) rejected former Chief Economic Advisor (CEA) Arvind Subramanian’s claim that Gross Domestic Product (GDP) numbers have been inflated, said media reports.

Subramanian in his study, reported yesterday, had said that India’s economic growth was overestimated by 2.5% points per year between 2011-’12 and 2016-’17, a period when both the United Progressive Alliance (UPA) and National Democratic Alliance (NDA) governments were in power.

In his article in The Indian Express yesterday, Subramanian had said the actual growth figures between 2011 and 2017 — a period that spanned the UPA2 and the Narendra Modi government’s first term – werecloser to 4.5 per cent and not 7 per cent.

He has also suggested that the GDP estimation be revisited by an independent task force comprising national and international experts, statisticians, macro-economists and policy users.

The PM’s advisory body said Subramanian had made “strong claims”.

“It is worth noting that the base year of India’s income calculations shifted to 2011-’12 on the basis of recommendations of several committees with experts in National Income Accounting,” the EAC said. “It was on the basis of these recommendations, started in 2008, that the government implemented the change from January, 2015. Therefore, it is wrong to suggest that the views of experts have not been taken into account while changing the Base Year…”

Also Read: India’s growth rate overestimated by 2.5%, says study by former chief economic advisor

The advisory body also claimed that a country’s GDP should be measured in nominal terms, not in terms of real growth rates. “The Economic Advisory Council will examine in detail the estimates made in Subramanian’s paper and come out with a point-by-point rebuttal in due course,” it added.

It also accused the former CEA of attempting to sensationalise the matter, and said this was undesirable “from the point of view of preserving the independence and quality of India’s statistical systems”.

“These are certainly issues that Dr Subramanian must certainly have raised while he was working as CEA, though by his own admission, he has taken time to understand India’s growth numbers and is still unsure,” the council added.

The statement follows a clarification last evening from the Ministry of Statistics, which said estimates of the country’s economic growth are based on “accepted procedures, methodologies and available data”.

The Council argued that Dr. Subramanian, in his research, used “cross-country regressions” to estimate the GDP and said it was a “most unusual exercise”.

“Using cross-country regressions to estimate GDP is a most unusual exercise, as is the suggestion that any country’s GDP that is off the regression line must be questioned. The proxy indicators that he used can also be questioned. Nor does this exercise allow for GDP increases on the basis of productivity gains,” the statement read.

“A country’s GDP is in nominal terms and any exercise should be on the basis of nominal figures, not real growth rates,” it added.

Also Read: RBI cuts interest rates as economy slows, India loses out to China as fastest growing economy

Subramanian had said inaccurate statistics on the economy “dampen the impetus for reform”, and restoring growth must be the current government’s key policy objective. “In reality, weak job growth and acute financial sector stress may have simply stemmed from modest GDP growth,” he had added. The same day, the Centre claimed Subramanian’s estimates were based on “accepted procedures, methodologies, and available data”.

In May, the government had announced that India’s growth rate had declined to 5.8% in the last quarter of the financial year 2018-’19. This was the slowest pace of growth in 17 quarters.

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Vistara and Air India airlines to merge by March 2024

The latest notification states that SIA is also investing Rs 20,585 million in Air India as part of the transaction.

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Vistara and Air India airlines to merge

Tata Sons and Singapore Airlines (SIA) have agreed to merge Air India and Vistara airlines by March 2024. The latest notification states that SIA is also investing Rs 20,585 million in Air India as part of the transaction, giving SIA a 25.1 percent stake in the Air India group.

Currently, Tata Group holds 51 percent of the shares in Vistara, and Singapore Airlines has the remaining 49 percent. According to the release, SIA and Tata have also agreed to take part in future capital investments that may be necessary to finance the expansion and operations of the larger Air India in the fiscal years 2022–2023 and 2023–2024.

Tata Sons chairman N Chandrasekaran said that the merger of Vistara and Air India is an important milestone in their journey to make Air India a truly world-class airline. He said they are transforming Air India, with the aim of providing a great customer experience, every time, for every customer.

Read Also: Mamata Banerjee loses temper at government event in West Bengal

He further said that as part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, and enhancing safety, reliability, and on-time performance. He stated that both Tata Sons and Singapore Airlines are excited about the opportunity of creating a strong Air India which would offer both full-service and low-cost services across domestic and international routes. He also thanked Singapore Airlines for their continued partnership.

SAI chief executive officer Goh Choon Phong said the merger provides an opportunity to deepen the company’s relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market.

SAI chief executive officer Goh Choon Phong said Tata Sons is one of the most established and respected names in India. SIA’s collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time. He said with this merger, SIA has an opportunity to deepen its relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market. He further said that they will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.

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Nykaa CFO Arvind Agarwal resigns

Arvind Agarwal earlier worked with Amazon and joined Nykaa in July 2020.

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Arvind Agarwal

Nykaa chief financial officer Arvind Agarwal resigned from his position on Tuesday. The fashion and beauty e-commerce platform announced his resignation.

In a BSE filing, Nykaa informed that Agarwal will be leaving the Company, effective close of business hours on November 25, 2022, to pursue other opportunities in the digital economy and start-up space.

Nykaa’s founder Falguni Nayar hailed Agarwal for the crucial role he played in the company’s emergence as a listed and profitable start-up. Nayar said the company is conscious of Agarwal’s personal dreams and wishes him all the luck.

Upon his resignation, Agarwal said his journey in Nykaa has been incredible so far and all his learning and experiences have set them up for pursuing different personal growth opportunities in the field. He further wished Nykaa good luck for the growth path ahead.

Read Also: Vadh trailer out: Sanjay Mishra, Neena Gupta steal hearts with their expressions and intriguing storyline | WATCH

Arvind Agarwal earlier worked with Amazon and joined Nykaa in July 2020. He was among the key managerial personnel and handled the initial public offer of the firm. Before Amazon, Agarwal worked with Vodafone India for more than 5 years. He had also worked with YOU Telecom, Adani Port, and Tata Teleservices.

Reports said Agarwal paid a total remuneration of Rs 19.58 million during the financial year 2021.

Apart from Nykaa, food delivery application Zomato also saw the resignation of its co-founder Mohit Gupta after 5 years of association with the company.

Gupta, in a message, stated that he decided to move on from Zomato to seek other unknown adventures. He also hailed Deepinder Goyal as he has become a more mature and confident leader who is capable of leading the business into a bright future.

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Jeff Bezos warns of recession, advises people to refrain from buying TV, fridge, cars during holiday season

The former CEO of Amazon also advised small business owners to put off purchasing new equipment in favour of increasing their cash reserves.

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Jeff Bezos warns of recession, advises people to refrain from buying TV, fridge, cars during holiday season

In light of the possibility of a global recession, Amazon founder Jeff Bezos advised consumers to refrain from making significant purchases during the holiday season. Given the state of the economy, he urged people to keep their money safe and refrain from irrational spending in the upcoming months.

The business tycoon said American families should avoid purchasing big-ticket items such as new cars, TVs, automobiles, and refrigerators as the US is staring at a recession. He said American household debt has reached a record high of $16.5 trillion, and people are switching to credit to get their ends meet.

The former CEO of Amazon also advised small business owners to put off purchasing new equipment in favour of increasing their cash reserves.

Bezos said Take some risk off the table, adding, Keep some dry powder on hand. Just a little bit of risk reduction could make the difference for that small business if we do get into even more serious economic problems. You’ve got to play the probabilities a little bit.

He said things are slowing down and many sectors of the economy are seeing layoffs, and this is why you should hold onto your money.

Meanwhile, the founder of Amazon stated in the same interview that he will contribute the majority of his $124 billion income to charitable organizations in order to combat climate change and to help those who can bring mankind together in the face of escalating social and political conflicts.

Bezos did not say how much of his money he intended to donate. But he said, Yeah, I do, in response to the question of whether he will donate a significant percentage of his wealth to charity.

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