The Centre’s latest figures on growth in the country’s gross domestic product don’t add up and are “mystifying”, former Chief Economic Advisor Arvind Subramanian said on Friday.

The government said on February 29 that the Indian economy grew by 8.4% during the third quarter of 2023-’24, or between October 1 and December 31. This was the strongest growth registered by the country since the second quarter of 2022.

The government’s National Statistical Office, in its second advance estimate, also pegged the country's growth at 7.6% for the current financial year.

However, Subramanian, at the India Today Conclave 2024, said that the implied inflation in these numbers is 1% to 1.5%, while the actual inflation is between 3% and 5%.

“The economy is growing at 7.5% even though private consumption is at 3%,” he said. '“…So there is a lot of stuff about the numbers which you know, I don't understand. I am not saying these are wrong. That's for others to judge.”

Subramanian, who was the chief economic advisor from October 2014 to June 2018, added that foreign direct investment has declined sharply in the past two to three quarters.

“It's not just India's FDI coming down, but also India's share of global FDI going to emerging markets has also come down,” he said. “So the question is, if India has become such an attractive place to invest, why isn't there more FDI? Corporate investment is also well below 2016 levels.”

Data from the Reserve Bank of India in January showed that net foreign direct investment – or inflows minus the outflows – declined to $13.54 billion (Rs 1.12 lakh crore) from April to November 2023 from $19.76 billion (Rs 1.63 lakh crore) in the same period in 2022, according to Business Standard.

Subramanian, however, said that there were also factors that cause for optimism about the Indian economy, including the revival of manufacturing in southern states.

“Factories are coming up on a large scale, employing anywhere between 5,000-50,000 workers,” he said. “Moreover, India is also gaining global market share in service exports.”

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