Business

GDP figures to go up: Garg

GDP figures to go up: Garg
Subhash Chandra Garg
By Nagaland Post | Publish Date: 2/19/2019 1:13:52 PM IST

 Refuting charges of destroying the credibility of Indian data, the government said the revised GDP figures for demonetisation year was not cooked up and, in fact, the growth rates are likely to go up further due to the GST.

“It’s not cooked up at all. It’s data driven and real. Nobody has manipulated it. It’s possible that sometimes anecdotally it may appear to be an un-understadable kind of result because of the quirkiness in data which takes place on account of abnormal events like demonetisation,” Economic Affairs Secretary Subhash Chandra Garg told IANS.

On January 31, the government revised the Gross Domestic Product (GDP) growth rates by 110 basis points from 7.1 per cent to 8.2 per cent for 2016-17, the year of demonetisation, and by 50 basis points from 6.7 per cent to 7.2 per cent for fiscal 2017-18. Garg said the growth was reflected mainly in two sectors, construction and financial services, and was absent in sectors like manufacturing and mining when the figures were revised. This was primarily because demonetisation helped the two sectors directly.

“In financial services, the growth is calculated based on several parameters like deposits and many other. Likewise, construction activity went up at that time. There were several incentives which were in place for taking construction activity. The Construction activity actually went up.

“It’s possible that the growth is not reflected in other areas well. There’s no growth revision in manufacturing. There’s no growth revision in mining. It’s possible that it may be quirky but it’s possible,” Garg said, explaining the positive impact of demonetisation on economy.

Apart from defending the possibility of demonetisation jacking up GDP rates, NITI Aayog Vice Chairman Rajiv Kumar went a step further to suggest that the growth rates will see another revision upwards for the years since Goods and Services Tax (GST) was rolled in. “By the way, this (upward revision) will happen more with the implementation of GST as there are many sectors that have never given tax. Now they will come inside GST. This will increase further. Manufacturing will grow as more of the unorganised sector gets formalised.

“Revised figures can show the increase for the years since GST has been 2017-18 and 2018-19. I will not be surprised at all. Thousands of garment makers never gave any tax, now they are doing. Suddenly, you see garment industry larger than what it was,” Kumar told IANS.

On demonetisation, he said when nearly half of the economy that was running in black and is now included in the formal economy, it had to show the impact. When people decide to bring out their cash, show it as income and pay tax, it suddenly bumps up the activity, he said.

Though the government defends the recent revision of GDP figures along with the new back series of GDP data released last November, which trimmed growth rates in UPA era making Modi government look better in terms of growth, it rejected the recent data on jobs.

 

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