Former finance minister P Chidambaram slammed the Modi government over GDP numbers for Q3 of the financial year, which will be released by the Central Statistics Office (CSO) today. Chidambaram cited the latest SBI report that pegged the October-December GDP at 4.5 per cent. Chidambaram said Finance Minister Nirmala Sitharaman had maintained that she would not speculate on the GDP numbers. "She is right, but she can certainly calculate the GDP number," he tweeted.
He added: "SBI has done it. So have others. GDP for the third quarter is expected to be 4.5%. What will the GDP number be according to the calculation of the government?" He said if the Q3 GDP number turned out to be about 4.5 per cent, Finance Minister Nirmala Sitharaman "should not be surprised". "The whole country is resigned to another depressing number," he said.
FM said she will not speculate on the GDP number. She is right, but she can certainly calculate the GDP number.— P. Chidambaram (@PChidambaram_IN) February 27, 2020
SBI has done it. So have others. GDP for the third quarter is expected to be 4.5%. What will the GDP number be according to the calculation of the government?
A State Bank of India report recently said the GDP growth would remain flat at over six-year low of 4.5 per cent in Q3 of FY20. It, however, revised its FY20 growth estimate to 4.7 per cent from the earlier estimate of 4.6 per cent. DBS Bank also pegged the December quarter growth at 4.4 per cent and GVA at 4.3 per cent on the back of restocking demand, coupled with stabilising corporate earnings. Other forecasts by major banks and rating agencies for the third quarter include 4.5 per cent by YES Bank; 4.5 per cent by Kotak Bank; 4.8 per cent by HDFC bank; 4.6 per cent by IDFC First Bank; 4.5 per cent by CARE Ratings; and 5.1 per cent by CRISIL.
Chidambaram during a recent interview with India Today had rated Modi government's Budget 2020 as "zero", while adding the compelling need of the hour was to arrest the six-quarter decline and revive growth. "Current year nominal growth was estimated at 12 per cent, and we ended up with 8.5 (per cent). For the next year, if you are projecting nominal growth at 10 per cent, that's not a revival. And if nominal is going to be 10 per cent, how do you (the Centre) say that the growth will be 6-6.5 per cent?" he said. The Congress leader also said that historically, it had been seen that the difference between nominal growth and real growth was between 4 or 5 per cent.
Edited by Manoj Sharma