Congress stalwart Jairam Ramesh has ignited a fresh controversy by labeling the government’s inflation-adjusted GDP numbers as a ‘grand deception’ that conceals the nation’s true economic struggles.
In an extensive social media thread and follow-up interviews, Ramesh methodically unpacked the real GDP formula. ‘Inflation adjustment sounds scientific, but it’s selectively applied to flatter growth rates,’ he contended.
He marshaled evidence from multiple fronts: GVA (Gross Value Added) slowdowns, tepid capex by corporates, and a services sector buoyed artificially by IT exports. ‘Peel back the inflation layer, and growth evaporates,’ Ramesh illustrated with charts.
Particularly vocal on CPI-WPI mismatches, he noted how urban wage inflation outpaces official deflators. ‘Households are poorer in real terms, but GDP says we’re thriving—absurdity at its peak,’ he fumed.
Ramesh proposed radical reforms: annual base year updates, inclusion of high-frequency indicators like GST collections, and mandatory nominal disclosures. ‘Let citizens judge without the government’s filter,’ he appealed.
The critique lands amid whispers of pre-budget jitters. With RBI signaling rate pauses due to sticky inflation, Ramesh’s timing amplifies pressure on Nirmala Sitharaman’s team.
Defenders of the status quo argue real GDP is the global standard, essential for cross-country comparisons. Ramesh countered that blind adherence ignores India’s unique inflationary volatilities.
As political temperatures rise, this GDP skirmish exemplifies broader trust deficits in officialdom. Ramesh concluded optimistically: ‘Truth in numbers will restore faith; deception only delays the inevitable reckoning.’