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LATEST NEWS UPDATES | Through a rosy lens -Anup Sinha

Through a rosy lens -Anup Sinha

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published Published on Oct 7, 2022   modified Modified on Oct 7, 2022

-The Telegraph

The airbrushing of the Indian economy is damaging

The latest Monthly Economic Review from the ministry of finance gives the reader a great deal of comfort by indicating that all is well with the Indian economy. If there is any cause for concern at all, it is from external economic and political shocks: events like the Federal Reserve in the United States of America raising interest rates, or Russia invading Ukraine. Anticipating global macroeconomic changes is the need of the hour according to the Review. In a similar vein, when the Reserve Bank of India recently raised the repo rate for the fourth time since May 2022, the problems facing the economy were identified as being external. Domestic economic conditions have been claimed to be quite rosy, with credit growth increasing, investment activities picking up, and the utilisation of existing capacity in industry increasing perceptibly. There is a puzzle, however, when one notes that almost all major international agencies that make forecasts about GDP growth have reduced India’s projections for the current year and indicated that the next year would be worse than the current one. The RBI and the ministry of finance appear quite happy with forecasts that are higher than those made by other forecasting agencies. The International Monetary Fund has reduced the forecast for the current year as have Ficci, Crisil, Moody’s and the Asian Development Bank.

Why are there distinct differences in perceptions?  One reason could be that the rating agencies and global organisations are more aware of external economic shocks looming on the horizon. That would cast India’s analysts in poor light for having missed out on foreboding signals. 

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The Telegraph, 7 October, 2022, https://www.telegraphindia.com/opinion/through-a-rosy-lens-the-airbrushing-of-the-indian-economy-is-damaging/cid/1890564


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