"Peace is not an
absence of war, it is a virtue, a state of mind, a disposition for benevolence,
confidence, justice."
—Baruch Spinoza (Dutch,
1632-1677)
Word for the day
Calumniate (v)
To make false and malicious
statements about; slander.
Malice towards none
Is Trump becoming a big deal
for US markets?
First random thought this morning
The strength of the sentiment of Nationalism generally in various
people
Foreign job aspirant: Inversely proportionate to the
probability of getting the aspired job.
Parents of NRIs: Inversely proportionate to the affection
of the respective NRI wards towards their parent.
Common man: Inversely proportionate to their exposure to
the foreign land. (Exceptions: During terrorist attacks, national holidays
cricket matches and major festivals)
Film Stars: Inversely proportionate to the product of the
recognition they get from the local establishment and chances of their getting
entry into global cinema. (Exception: During the period close to the release of
their films)
NRIs: Inversely proportionate to the product of their
financial stability, children affection towards them and number of days
remaining in their favorite festivals.
GVA or GDP or whatever
The skepticism over veracity of economic growth data disclosed by
the agencies of Indian government is rising by the day.
A relatively large number of economists feel the credibility
associated with these numbers needs to be reassessed. In their view, the ground
realities are showing no material change that would suggest that the economy is
already back firmly on the growth path. Though most acknowledge bottoming of
the down cycle; few appear trusting the numbers presented by government
agencies.
In my view, the dispute over credibility of the data has two
dimensions:
(a) First, the change in
the method of computing the nation's economic growth perhaps has not been
managed well. A combination of the factors like inadequacy of historical series
and data dissemination; debate over appropriateness of the new methodology in
Indian context; and resistance to change, are driving a part of the criticism.
(b) Secondly, the
disaggregated data is not corroborating the aggregate numbers. The dismal
monthly IIP & PMI numbers, corporate results, and rising NPA numbers do not
compare with the industrial growth as reflected in the aggregate economic
growth data. Similarly, falling number of tourists, falling credit growth,
volume growth for telecom & insurance companies, poor state of real estate
and constructions sector etc. cast doubt over services growth. Two consecutive
poor monsoons, sharp fall in rural demand and ~5-6% food inflation, also do not
adequately explain the agriculture sector growth
I doubt that the skepticism could be emanating more from
perception rather than from knowledge of the reality.
The criticism perhaps fails in acknowledging the structural change
in rural economy. The importance of farming has shrunk materially in past
decade.
Overwhelmingly driven by corporate performance, large business
sentiment surveys and urban consumers' confidence, it might also be unfair in
underestimating the rising clout of self-enterprise and consumers beyond
metropolis.
Not being an economist myself and blissfully ignorant of MS Excel
working, I am totally ineligible to comment on the veracity or otherwise of the
official economic growth data. But still I do have the following comments to
make:
7%+ growth is indubitably impressive not only in the current
global context, but even during good times. But it is miserably inadequate if
only 20% of the population benefits from it. A 5% but more inclusive growth
would be much more cherished.
The condition on the ground may not be good, but it is much better
than what it was 10years or even 5years back, and improving steadily. I will
therefore be happy if the current trend of change continues for another decade,
regardless of how the headline number of GVA or GDP or whatever reads.
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