India's chief economic advisor Arvind Subramanian is a well-read, soft-spoken man, not known to have a temper or to lose his mind or sense of humour at any given time.
Yet on Tuesday afternoon, while addressing the press after his Economic Survey 2016-17 had been tabled in the parliament, the 57-year-old Oxford-educated doctorate of philosophy almost lost it while explaining why his GDP estimates for the year ought not be compared with anybody. Not with the GDP figures in the previous year and definitely not with those dished out by the IMF or ratings agencies like Standard & Poor, Moody's or Fitch.
"The ratings agencies do not reflect the real state of an economy. They follow inconsistent standards. We actually call it poor standards (pun intended)," he said. "They have used astonishingly inconsistent parameters to judge India and China. The Indian economy is robust and strong and we have taken so many reform measures. China is the single biggest risk to the world economy at large. Yet they did not downgrade China but actually gave them an upgrade while India's rating remains stable. We should question them and have a little fun (at their expense)."
The grouse is not a recent one but here are the facts. In November last year, S&P global ratings ruled out an upgrade for India against the Indian government's bid for one citing low per capita GDP and relatively high fiscal deficit. Most other rating agencies followed a similar pattern. At the same time, the agencies upgraded China that already enjoyed better ratings, in 2010, even as China's credit-GDP ratio had suffered following a credit expansion drive initiated in the previous year and growth slowed down from 10 to 6.5 per cent. China's rating has not been revised in the last 7 years.
"India could be very different from the comparators used by the ratings agencies. Many emerging markets are struggling but India has a strong growth trajectory, which coupled with its commitment to fiscal discipline exhibited over the last three years suggests that its deficit and debt ratios are likely to decline significantly over the coming years," Subramanian writes in the Economic Survey. "Even if this scenario does not materialize, India might still be able to carry much more debt than other countries because it has an exceptionally high "willingness to pay", as demonstrated by its history of not defaulting on its obligations."
The running feud between the agencies and the government has its genesis in late 2015, when Moody's Analytics intervened in the debate over rising polarization in the country going to the extent of issuing a warning that Prime Minister Narendra Modi risked losing his domestic and global credibility, if he failed to rein in his colleagues from making provocating statements against minorities. Many neutrals then believed Moody's Analytics had stretched its mandate by sermonizing on political issues.
Even then, Subramanian on Tuesday was in an unusually combative mood. He did not spare even the International Monetary Fund. Earlier this month, the IMF had slashed India's growth forecast from an earlier 7.6 per cent to 6.6 per cent citing the government's demonetization on November 8 for the revision. Subramanian himself gave out a growth projection between 6.75-7.5 per cent, which is lower than 7.6 per cent growth of 2015-16, but he warned journalists to not compare the figures.
"I do not want to be held responsible for over estimization by the IMF," he said. "Do not compare these figures. I will read each line that you write tomorrow and will come back to you (if you do)."
Everybody in the hall laughed at that. So did the CEA. But the atmosphere was a tad uneasy. In the world of economics and numbers, comparisons are inevitable.