New Delhi : Noted economist and member of the Economic Advisory Council to the Prime Minister (EAC-PM) Rathin Roy Wednesday dismissed lowering of India’s growth projections by the IMF and the World Bank, saying they often go ‘wrong’. While the International Monetary Fund (IMF) has lowered India’s growth forecast for the current fiscal by 0.5 percentage points to 6.7 per cent, the World Bank has pegged economic expansion at 7 per cent, down from 7.2 per cent projected earlier.
The Asian Development Bank too lowered India’s current fiscal growth to 7 per cent from 7.4 per cent, while RBI cut economic growth forecast to 6.7 per cent from earlier projection of 7.3 per cent. “IMF’s growth projections are 80 per cent wrong…World Bank’s growth projections are 65 per cent wrong,” he said in a media interaction when asked to comment on lowering of growth projections by international multilateral lending agencies.
While the council has been dismissive of projections of multi-lateral lending agencies, the government does not miss an opportunity to tom-tom improvement in ease of doing business ranking by World Bank and other such improvement in indices. Roy, who is also director of economic think tank NIPFP, however, said the council will examine causes of slowdown. India’s economic growth slipped to a three-year low of 5.7 per cent in the first quarter of the current fiscal. Replying queries at the same media interaction, Niti Aayog member and Chairman of the Council Bibek Debroy said “whether we like it or not we don’t have good data on employment”.
“In a country like India, you cannot get good data on employment and jobs from enterprise surveys. The labour bureau enterprise surveys covers less than 1.5 per cent of total employment,” Debroy said. Noting that we can get data on unemployment and employment in India is through household surveys, he said the last NSSO household survey was out in 2011-12 and the next results of NSSO household surveys will not be available till 2018.
World Bank lowers India’s growth forecast
India’s GDP may slow from 8.6 per cent in 2015 to 7.0 per cent in 2017 because of disruptions by demonetisation and the GST, the World Bank has forecast and warned that subdued private investment due to internal bottlenecks could put downside pressures on the country’s potential growth. IMF also lowered India’s growth projection.