Former finance minister P Chidambaram has a word of caution for the International Monetary Fund (IMF) and its India-born chief economist Gita Gopinath after the agency slashed India’s growth forecast.
The agency had on Monday lowered India’s economic growth estimate for the current fiscal to 4.8% and listed the country’s much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.
The senior Congress leader pointed out to Gita Gopinath’s previous lowdown of the Centre’s demonetisation move as he launched his latest critique of the government.
“IMF Chief Economist Gita Gopinath was one of the first to denounce demonetisation,” Chidambaram said in a series of tweets on Tuesday morning.
“I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath,” the senior Congress leader said.
The country’s growth is estimated at 4.8% in 2019, projected to improve to 5.8% in 2020 and 6.5% in 2021 (1.2 and 0.9 percentage point lower than in the October World Economic Outlook), supported by the monetary and fiscal stimulus as well as subdued oil prices, IMF had said.
2019 refers to the fiscal year 2019-20. IMF had pegged India’s economic growth at 6.1% for 2019 in October last year.
“Reality check from IMF. Growth in 2019-20 will be BELOW 5 per cent at 4.8 per cent,” Chidambaram, who is being probed for charges of corruption and money laundering, tweeted on Tuesday.
“Even the 4.8 per cent is after some window dressing. I will not be surprised if it goes even lower,” he added.
Gita Gopinath had said growth in India slowed sharply “owing to stress in the non-bank financial sector and weak rural income growth”.
She had, however, said the growth momentum should improve next year due to factors like the positive impact of corporate tax rate reduction.
India’s economy grew just 4.5% in July-September 2019 period—the weakest pace in nearly six years.
The government has been taking various measures to bolster growth.
Finance minister Nirmala Sitharaman, who will present her second budget on February 1, is expected to increase infrastructure spending and boost rural expenditure to revive growth.
