Economists slam govt claims of rapid economic growth as a sham

Claims of rapid growth the Indian economy is projected to be making came in for scrutiny from economists who slammed the Union government for allegedly making exaggerated claims, parroted even by institutions such as the UN and IMF.

Speaking at a two-day seminar on ‘Measuring Recovery’ in Delhi that concluded on Thursday (November 30), noted economist Prof (retd) Arun Kumar observed that the claims made by the government are exaggerated and are based on flawed data. “Government’s exaggerated claims about India's rapid growth are echoed even by the UN and IMF, relying on the government-provided data. But their data collection method is deeply flawed. New indicators are required based on fresh surveys. But no new survey of the unorganised sector has been conducted since 2015,” Kumar, who is an expert in black money control, said at the conference.

The economist, who taught at Jawaharlal Nehru University, also underlined several challenges India is faced with, such as daunting cost of living, high levels of sovereign debt, tight financial conditions, uncertainties of war and climate crisis, among others, which the Reserve Bank of India has recognised in recent times in view of the global headwinds the country is faced with. “And yet, there is a rather celebratory note in the self-appraisal of the government in terms of India’s economic recovery,” Kumar said.

Fall in unemployment not equal to rise in employment

A recent report by the Centre for Monitoring Indian Economy (CMIE), which claims an upward trend in employment in India’s labour market with 15 million people entering the workforce, also came in for scrutiny. A fall in unemployment is not equal to a rise in employment, the economists observed.

Most of the new jobs are distress-driven, according to them. Though the data shows the average earnings of the workforce are going up, the real earnings are going up only for casual work, while in other categories the earnings are either stagnated or going down in real terms. Also, the percentage of employers, the job providers, is stagnating, they said.

“The type of job that constitutes the highest share of the workforce is not just hugely precarious in its nature but also the real earnings from the job have not seen any rise,” said Mrinalini Jha, an assistant professor with OP Jindal Global University.

Senior economist CP Chandrashekhar spoke about a peculiar inflationary rise in the country driven by oil and food, two large contributors, which have added to the woes of people. He also spoke of the large amount of money that came into lower-middle-income countries which ultimately has resulted in rising debt.

Data on women's employment 'skewed'

Dipa Sinha, an assistant professor at Ambedkar University, Delhi, said the government data was skewed to show that there is no problem of female unemployment. The data needs to be challenged, she said, and called for investment in infrastructure like childcare facilities for women. “Now we have begun counting the unpaid domestic work, but to what end, does it actually empower women? If we really care about their work, we must invest in infrastructure that supports them like childcare facilities, but our interest lies in just counting their work, and driving employment figures,” she added.

Speaking on unequal recovery and its costs, journalist Paranjoy Guha Thakurta said, “We have gone one step further from cronyism. The nexus between governments and conglomerates has been strengthened like never before. We are moving towards oligarchy.”

Apart from labour and wages, official claims on economic recovery, unequal K-shaped recovery, corporate write-offs and rural debt crisis, and social protection were discussed threadbare. The experts also delved into how divisive politics is impacting the lives of Muslims in the country, focusing on how they are being ghettoised not only in terms of their living spaces in cities but also as segments of the labour market.

The conference also marked the release of the second edition of the ‘State of Finance in India’ report, edited by CP Chandrashekhar, Jayati Ghosh, Shalmali Guttal, Joe Athialy and Anirban Bhattacharya. The report is the first of its kind that expands the domain of finance and economics beyond the confines of ivory tower experts. The report invites writings from a cross-section of academics, policy-makers, activists, social practitioners and eminent economists who engage with questions from the ground.

The conference was organised by the Centre for Financial Accountability, Economic Research Foundation and Focus on the Global South. Apart from academicians from various universities and institutions, like TISS, the seminar had some representatives from the banking sectors among the speakers.