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A former official casts doubt on Indias GDP figures

ALMOST TWO years ago Arvind Subramanian, then Indias chief economic adviser, published a little-noticed passage in the finance ministrys annual economic survey. The previous two years posed a puzzle, he wrote. India had reported miracle growth in GDP (averaging 7.5%) despite miserable growth in investment, exports and credit. He looked for comparable examples elsewhere since 1991. He found none. No country had grown faster than 7% in such circumstances. None, in fact, had grown faster than 5%. Indias rapid expansion, he warned, might be hard to sustain.Or, indeed, hard to believe. Mr Subramanians official position meant he could not say that loudly then. But he is saying it now. In a paper published by Harvard University, where he is a visiting fellow, he argues that Indias growth figures have been greatly overstated. From the 2011-12 fiscal year to 2016-17, its economy officially expanded by about 7% a year, eventually outpacing Chinas to become the fastest-growing big economy. That boast has helped entice over $350bn of foreign investment in the past seven years. But Indias true growth, Mr Subramanian thinks, is more like 4.5%. Rather than outperforming China, India has underperformed Indonesia.
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