Well, the reasons can be several. From attracting foreign direct investments to softer international loans to indigenous morale boost to getting elected again to revived economic activity within the country to better sovereign ratings, to name a few. But the bigger reason to fudge its GDP numbers is to compete to be declared the fastest growing economy in the region. Historically the war for this coveted economic trophy of being named the fastest growing economy in this region has remained between China and India. But the tables started to turn recently.
With China’s displeasure with India based on protection for Dalai Lama, India’s open opposition to CPEC funded by China in Pakistan, Russia’s historical ties with India shifting in favour of China and an escalating currency crisis of the recent past has forced even the world’s biggest democracy to to make decisions like an authoritative and dictatorial financial regime. India has to compete with China for regional economic might otherwise it will lose the race for the estimated $2 trillion dollars that is to be invested in this region in the next 2 decades. In the investment world, money follows perception and not the other way around. The economic perception as an ideal investment decision of India is now shifting in the favour of smaller regional destinations such as Sri Lanka, Pakistan and Bangladesh and to add insult to the injury, China has shown its commitment and its interest both, financially for these countries. Now in light of this above argument, how did India lie about its GDP growth ?
The worst thing a country could do is to exaggerate its future GDP claims but a disastrous thing any country can do is to go back into the past and revise its GDP figures and on top of it all, do it upwardly. It does not stop here, a step above this disastrous move is to refuse to give what is called the GDP Series, a process through which the revision is calculated. In January 2015, India revised its previous GDP figures upwardly but retrospectively from 5% to almost 7% for the years 2013 and 2014. Once the historical GDP figures are revised, they become the basis for the future growth series as well, and to not declare the numbers upon which the past GDP is revised then one has absolute right to question the current and the future GDP figure. And it has been 2 years since 2015 that India refuses to provide these revision series. First they said that these figures would be made available in December 2015, then the date was moved to June 2016 and now they have been delayed indefinitely according to the authorities.
India has a history of revising GDP numbers upwardly or downwardly, whenever it pleases to do so. From 7.2% to 6.5% in fourth quarter of 2015. With an extremely poor reputation for statistics reliability in India being an open secret in the world financial corridors, the next best way to gauge GDP growth should be by the means of calculating growth in personal or household income, but neither was relied upon. With such practices and now the western financial world complaining, the clear loser will be India and the unexpected winner will be China. Sometimes leaders make hasty decisions in order to stay in power, but when economic figures are lied about in order to retain power then the only loser becomes its own economy and its people consequently. Welcome to the MOODY economic revelations of the most famous Chaiwala in Asia, Mr. MODI.
This is guest article by Mir Muhammad Ali Khan.
Mir Mohammad Alikhan is internationally renowned Investment Banker, Entrepreneur & Capital Markets Advisor. At the age of 29, he became the youngest Chairman and Founder of a Full service Investment Bank in America and the first Muslim to have owned an investment bank on Wall Street. He has had a successful career as Founder & Chairman The Financial Group, Inc., Federal Advisor to Govt. of Pakistan, a Member of New Jersey Governors Council, a Senior Advisor to New Jersey State Mayors and US State Senators. He introduced Islamic Banking Research into mainstream America by co-sponsoring and advising Harvard University to launch Harvard Islamic Finance and Information Program (HIFIP).
He also developed “THE WORD’S FIRST ISLAMIC BANKING BENCHMARK INDEX on WALL STREET Named:KMS-SAMI: (Socially Aware Muslin Index) Which Is Now A Functional Index Run By The Dow Jones Indices. He has also been featured in “Who’s Who of Top Executives in the World”. Featured in “Humans Of Pakistan” and in 2015 he became the first Pakistani ever to have a movie produced on his life through a first time co-production of Hollywood and Pakistani production house Sermad Films, The Producers of the movie “JALAIBEE”.WWW.MIRMAK.NET/Biography