Member of RBI's rate-setting panel questions world-beating GDP numbers
NEW DELHI: India probably overestimated manufacturing output while calculating economic growth that topped 8 per cent in the June quarter, according to a member of the central bank’s rate-setting panel.
The new gross domestic product series has mostly replaced the Annual Survey of Industries with corporate financial data for estimating manufacturing value added, according to an article Ravindra Dholakia, a member of the Monetary Policy Committee, co-authored with R. Nagaraj and Manish Pandya in the latest edition of the Economic and Political Weekly. This has resulted in its higher share in GDP and a faster growth rate compared to the older series, they said.
Statistics ministry data on Friday showed manufacturing sector expanded 13.5 per cent in the three months to June, driving the broader economic growth by 8.2 per cent -- the fastest pace for any major economy. Finance minister Arun Jaitley attributed the economy’s performance to the government’s reforms and fiscal prudence amid uncertainty spawned by the trade spat between the US and China.
“Does the new series represent a fuller description of the manufacturing value added, or is it an overestimation?” the authors wrote.
Higher manufacturing growth rate gives “rise to serious doubts about the veracity of new estimates” and is at “variance with other macroeconomic correlates,” wrote Dholakia, an external member on the monetary policy committee and a management professor.
The Reserve Bank of India has maintained its full-year growth forecast at 7.4 per cent, while flagging risks from high oil prices and trade tensions turning into a currency war. The central bank increased policy rates twice since June to curb inflationary pressures.
Dholakia has been advocating lower interest rates to support growth and was the only member to oppose a rate increase at the August meeting.
courtesy : timesofindia.indiatimes.com
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Lok Sabha confirms imposition of President's rule in Manipur
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New Delhi (PTI): The Lok Sabha early Thursday adopted a Statutory Resolution confirming the imposition of President's rule in Manipur with opposition supporting the decision but slamming the Centre for the situation in the state.
Replying to a short debate, Union Home Minister Amit Shah said the government has taken all possible steps to bring back normalcy in the restive northeastern state.
He said there has been no violence in Manipur in the last four months, adding that talks were on with both Meitei and Kuki communities for a peaceful solution.
"By and large the situation is peaceful. As long as people are in camps, I would not say the situation is satisfactory. The government is taking all possible steps to restore peace in Manipur," he said.
The home minister said the ethnic violence in Manipur had started following an order of the state's high court.
"The day the order came, we sent the central forces by air. There was no delay on our part (in taking action)," he said.
He said, so far, 260 people have died in the violence that started in May 2023 and 80 per cent of them lost their lives within the first month.
Shah said he did not want to compare the violence that had taken place during the tenure of the previous governments but wanted to tell the House about the clashes between the Naga and Kuki communities that took place in the 1990s over five years.
"Sporadic violence continued for a decade where 750 people lost their lives. There were Kuki-Paite clashes in 1997-98 when 352 people were killed. In the Meitei-Pangal clashes in the 1990s, over 100 people died. Neither the then prime minister nor the then home minister visited Manipur," he said.
The home minister said an impression has been given that violence erupted only during the BJP rule, which is not correct.
Earlier, participating in the debate, Congress leader Shashi Tharoor said his party supported the resolution but wanted the restoration of peace and stability in the state.
"End insurgency, restore peace and stability, promote dialogue with each other, promote inclusivity," he said.
Sayani Ghosh of the Trinamool Congress said her party too supports the resolution but favours early restoration of peace.
DMK's K Kanimozhi said "divisive" politics should come to an end in Manipur.
"We want normalcy to return, peace and harmony should be restored. We also want the formation of an elected government," she said.
Shiv Sena (UBT) MP Arvind Sawant expressed concern over the prevailing situation in Manipur and said peace must be restored.
NCP (SCP) member Supriya Sule said the President's Rule is not good for democracy and sought "strong intervention" of the home minister in bringing back normalcy.
The resolution 'Consideration on the Proclamation issued by the President on the 13th February 2025 under article 356 (1) of the Constitution in relation to the State of Manipur’ was adopted by the House by a voice vote.
The violence started after a 'Tribal Solidarity March' was organised against the high court order.
There have been many efforts from the central government to bring the warring communities to the negotiating table.
