Did Piyush Goyal Agree With Arvind Subramanian On GDP Being Miscalculated?
A few days ago, Union Commerce Minister Piyush Goyal had set social media abuzz with his comments while attending a Board of Trade meeting, where he said, “Don’t go into calculations. Maths didn’t help Einstein discover gravity”. Apart from the gaffe over Einstein, the statement has something very serious to look into as it reminds us of former chief economic advisor Arvind Subramanian’s paper on GDP miscalculation.
Piyush Goyal, while talking to the media defending the government against the claims of an economic slowdown where he made the statement. He was answering questions regarding the Modi government’s target to make India $5 trillion economy by 2024, and its correlation with the current GDP growth rates.
Goyal said these numbers and calculations are very much misleading, stating that it should not be much of a focus.
The comments by the commerce minister are in a way in accordance with former chief economic advisor Arvind Subramanian’s paper in Harvard University where he argued that India’s GDP growth is lower than calculated. Subramanian had argued that the GDP growth rate between 2011 and 2017 was 4.5 per cent and not 7 per cent as said by the government. The need to recalculate the GDP figures was even expressed by former RBI governor Raghuram Rajan when he had warned about the economic scenario last month. Rajan had said that estimates of growth in India have been brought down, but Indian should pay attention to Arvind Subramanian. A fresh look from an independent expert at the way we calculate GDP is needed so that the numbers don’t mislead the GDP numbers.
The minister also said that if you go by structured formula then no innovation can take place. Does this mean we have to think about a new formula to calculate growth?
The minister’s remarks pose a question on the GDP calculations as to what figures were misleading. The one which is projected now or the one Arvind Subramanian was referring to?
Netizens Troll Goyal For Gaffe
Goyal while making the statement got confused between Newton and Einstein and said the later discovered gravity.
However, Netizens not to miss an opportunity took to twitter and expressed the blunder made by the minister. Within hours Goyal’s remarks were trolled all over social media with hashtags #Newton #Einstein became top trends.
Recently, finance minister Nirmala Sitharaman was also caught in a similar situation when she blamed ‘millennial mindset’ to choosing Ola & Uber over a personal vehicle for the crisis in the automobile industry.
The finance minister faced flak from netizens for her remarks with many of them taking a satirical dig on her statement with thousands of tweet with #BoycottMillenials.
Both these ministers got trolled extensively for their comments. Piyush Goyal later in a statement, explained, “The comment that I made had a certain context. Unfortunately, some friends have sought to remove the context, pick up one line and create a very mischievous narrative.”
Although it is unclear as to what context he was referring to because the comments had a factual error as gravity was discovered by Newton and not Einstein.
The Modi government is under the gun due to the current economic slowdown with people losing jobs in almost every sector, automobiles apart. To meet the ambitious targets and contain the fiscal deficit at 3.3% of the GDP is not going to be easy for the government. In such a situation the ministers’ remarks only show the government’s hesitation in accepting the current situation while desperately trying to find a solution.