GDP numbers overstated due to price deflators: Congress

New Delhi: Congress on Friday hit back at the government after it claimed that India’s economic growth stood at 7.8 percent in the first quarter of the current fiscal saying numbers are overstated by a full percentage point because of the price deflators used. Going by present trends, growth for the year 2022-23 may hover around 6 percent, and with growing inequality, even this disappointing GDP growth will not lead to rising incomes for the vast majority of Indians.

Taking to X, formerly Twitter, Congress General secretary Jairam Ramesh said: “After the headline quarterly GDP growth numbers came out last evening and after the usual round of drum-beating over them, here is the harsh reality: The headline numbers are overstated by a full percentage point because of the price deflators used. Consumption growth is lagging significantly behind, especially in rural India. Import growth is outstripping growth in exports. Manufacturing growth has still not picked up contrary to whatever claims that are being made.”

He also stressed that “the monsoon deficit effects will begin to reflect second quarter onwards and going by present trends, growth for the year 2022-23 may hover around 6 percent.”

“With growing inequality, even this disappointing GDP growth of 6 percent will not lead to rising incomes for the vast majority of Indians,” Ramesh added.

He also attached two tables of the GDP numbers to back his claims.

India’s gross domestic product (GDP) grew by 7.8 percent in the April-June quarter of current fiscal (2023-2024), compared to a growth of 6.1 percent in the previous January-March quarter of fiscal 2022-23, according to official data shared by the National Statistical Office.

However, compared to 6.1 percent growth recorded in January-March period of 2022-23, the GDP growth for the first quarter of 2023-24 was higher at 7.8 percent.

“Real GDP or GDP at constant (2011-12) prices in Q1 2023-24 is estimated to attain a level of Rs 40.37 lakh crore, as against Rs 37.44 lakh crore in Q1 2022-23, showing a growth of 7.8 percent as compared to 13.1 percent in Q1 2022-23,” an official statement said.

All activities like agriculture, mining, manufacturing, electricity, construction, hotel and transport, showed a decline in the first quarter of 2023-24 against the first quarter of 2022-23, the data showed.

According to the RBI’s monetary policy committee (MPC), the real GDP growth for the first quarter of 2023-24 was projected at 8 percent.

The GDP growth recorded for the first quarter of the current fiscal though is even lesser than RBI’s estimate.