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Abhijit Banerjee candid on slow down of Indian economy

Abhijit Banerjee candid on slow down of  Indian economy
Abhijit Banerjee
New Delhi, Oct 15(AGENCIES) | Publish Date: 10/15/2019 11:25:48 AM IST

“There is enormous fight going on in India about which data is right and the government has a particular view that all data that is inconvenient to it is wrong” said Indian-American economist Abhijit Banerjee after winning the Nobel Prize on October 14. 

Abhijit Banerjee, who was the joint winner of the award with his wife Esther Duflo and Harvard’s Michael Kremer, also pointed the warning signs everyone should be wary of. 

He referred to National Sample Survey (NSS) statistics on average consumption between 2014-15 and 2017-18, in urban and rural areas which had slightly gone down. 

He said it was the first time that this happened in many years and adding it was a warning sign. 

 Banerjee also weighed in on the ongoing controversy - an “enormous fight”, as he called it - in India over which data and numbers are to be relied upon as indicators of the health of the economy and criticized the government for considering as “wrong” all data that is “inconvenient to it”.

The newly-minted economics Nobel laureate Abhijit Banerjee has warned that the Indian economy is going into “a tailspin” and his prescription is for the government to focus to increasing demand rather than on deficits or stability.

When “the economy going into a tailspin is the time when you don’t worry so much about monetary stability and you worry a little more about demand, the demand is a huge problem right now in the economy,” he said at a news conference at the Massachusetts Institute of Technology (MIT) in Cambridge on Monday after his prize was announced.

He also criticised Prime Minister Narendra Modi’s government over the use of data.

“There is enormous fight going on in India about which data is right. and the government has a particular view of all data that is inconvenient to it is wrong,” he said.

“Nonetheless, this is something that even the government is recognising that there is a problem,” he added.

Banerjee was reflecting the views of many economists who have questioned the reliability of government data, among them former government chief economic adviser Arvind Subramanian, who asserted in a Harvard University paper that India’s growth rate may have been overstated by 2.5 per cent for each of the years between 2011-12 and 2016-17.

Banerjee was one of the advisers to the Congress Party in this years elections in moulding the Nyuntam Aay Yojana (NYAY) programme it proposed to give a minimum guaranteed income to 20 per cent poorest people or 50 million families in India.

Banerjee is the Ford Foundation International Professor of Economics at MIT and his wife co-recipient of the Nobel Prize for Economics, Esther Duflo and is the Poverty Alleviation and Development Economics Professor there.

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