New Delhi, May 30: The Congress on Thursday took a swipe at the government over the state of the economy, saying fixation on its size gets headlines but consumption is tepid and investment momentum is just not picking up.
Congress general secretary, in-charge of communications, Jairam Ramesh said first the NITI Aayog CEO makes a claim on the size of the Indian economy which apparently surpassed Japan’s “just as he was speaking”.
“Then a member of the NITI Aayog contradicts its CEO and presents a more realistic picture,” he said.
“Now the Vice Chairman of the NITI Aayog takes a completely different line saying that his colleagues were using the wrong standard for comparison and that actually India’s economy is already half the size of that of the USA,” Ramesh said.
“This fixation on the size of the economy alone is not helping. It gets headlines but meanwhile consumption is tepid and investment momentum is just not picking up,” the Congress leader said.
His remarks came after NITI Aayog Vice Chairman Suman Bery said that the size of the Indian economy in the purchasing power parity (PPP) term is already USD 15 trillion, which is more than half the size of the US economy.
The purchasing power parity (PPP) is the amount of currency units required to purchase a basket of goods and services that can be purchased with one unit of the reference economy’s currency.
“There has been a lot in the newspapers about our being the fourth largest economy. Those are all measured at market prices, but the real way of measuring productivity is purchasing power parity.
“And while we are USD 4 trillion GDP at market prices, at PPP term, we are USD 15 trillion economy,” Bery said while addressing the Annual Business Summit 2025 of the Confederation of Indian Industry (CII).
He said that economists tend to measure labour productivity at purchasing power parity as PPP measures the real size of the economy of a country against the size of the US economy.
“And so while we (the size of Indian economy in PPP term) are at USD 15 trillion, the United States is at USD 29 trillion. So we are roughly half the world size of the US economy,” Bery said.
NITI Aayog member Arvind Virmani on Monday said India is set to become the fourth largest economy in the world by overtaking Japan by the end of 2025.
The International Monetary Fund (IMF), in its World Economic Outlook report released in April, had said that India is expected to be the fourth largest economy in the world with a GDP of USD 4.19 trillion in 2025, ahead of Japan.
“India is in the process of becoming the fourth largest economy, and I am personally confident that will happen by the end of 2025 because we need (data) of all 12 months GDP to say that, you know, to assert that. So to say till then, it remains a forecast,” Virmani had said.
Asked to comment on NITI Aayog CEO BVR Subrahmanyam’s remark that India has become the fourth largest economy in the world, the eminent economist had said: “So this is a complicated question, and I really do not know what the words anybody has used. Perhaps there was some word which was missed or something.”
Citing IMF data, Subrahmanyam, last week, said that the size of the Indian economy today is larger than Japan’s.
“We are the fourth largest economy as I speak. We are a USD 4 trillion economy as I speak,” the NITI Aayog CEO had said. (PTI)
