Congress leader Jairam Ramesh
Credit: PTI Photo
New Delhi: The Congress on Friday sought to downplay the latest GDP figures, saying growth that relies on net taxes and comes despite flagging consumption rise, is neither desirable nor sustainable and bodes poorly for the country's medium-term growth.
In a post on X, Congress leader Jairam Ramesh said, "The Q3 GDP growth figures have come in, and the BJP's spin doctors led by 'FekuMaster' himself, will tell you that this is a reflection of an 'India Sparkling'."
"The GDP growth that relies on growth in net taxes, and comes despite flagging consumption growth, is neither desirable nor sustainable. It bodes poorly for our medium-term growth," he also said.
"Of course, this won't stop the Prime Minister's drumbeaters," Ramesh said in his post after India reported GDP growth at 8.4 per cent in the third quarter of this financial year.
He said that the reality check is that the GDP is GVA plus net taxes and the Gross Value Added (GVA) is considered by economists as the most meaningful metric to track actual economic activity.
"GVA growth was only 6.5 percent, but there has been a 1.9 per cent change in net taxes. This has made it appear that GDP growth is 8.4 per cent."
"Net taxes have not risen due to greater revenue collection - which would have been a welcome development. They have actually fallen due to a decrease in subsidies provided to the vast majority of Indians," he said.
Ramesh said private consumption, the money the average person spends on buying goods and services - is the largest and most important part of the GDP.
"Growth in private consumption expenditure in FY24 is now expected to be 3 per cent, the slowest in twenty years.
"All this taken together, all the data points continue to indicate severe economic distress for the common man: consumption is barely growing year-over-year, and subsidy support from the Modi Government is also declining," the Congress leader said.
"Here are the two key facts we should know about the Modi Government's economic performance: Even after these GDP numbers, growth has been much much slower under the Modi government than the UPA. We saw 7.5 percent average annual GDP growth in the UPA, vs 5.8 percent under the Modi Government," he noted.
"Average GDP growth rate in Modi 2.0 is 4.3 percent, the lowest in over 30 years," the Congress leader claimed.
India's economy grew by better-than-expected 8.4 per cent in the final three months of 2023 - the fastest pace in one-and-half years, fortifying Prime Minister Narendra Modi's record of providing a world-beating growth rate ahead of general elections.
The growth rate in October-December was higher than 7.6 per cent in the previous three years, and it helped take the estimate for the current fiscal (April 2023 to March 2024) to 7.6 per cent, according to the data released by the National Statistical Office (NSO) on Thursday.
The estimate for 2023-24 is better than the 7.3 per cent projection made in January and exceeds by a significant margin the outlook of 6.7 per cent and 6.3 per cent made by the IMF and World Bank, respectively.