GDP decline was 50%, not 23%: Prof. Arun Kumar
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New Delhi: According to Prof. Arun Kumar, the decline of GDP is 50 per cent, not 23 per cent as the National Statistical Organization (NSO) claimed. Professor Arun Kumar, in a web policy speech organized by Impact and Policy Research Institute (IMPRI), refuted the GDP decline and unemployment statistics given by NSO and Centre of Monitoring Indian Economy (CMIE), respectively.
Professor Arun Kumar is a Malcolm Adiseshiah Chair Professor, Institute of Social Sciences, New Delhi. He said that this miscalculation was due to inattention towards the unorganized sector and claimed that India's policymakers treat it as 'residual.' He stressed that the practice followed in GDP calculation involves assuming the unorganized sector to be growing at a similar rate as the organized sector. This leads to an overestimation of the GDP.
Further, on the topic of unemployment, Prof. Kumar disputed CMIE's estimation of about 12.2 crores of unemployed workers. According to him, the number swells to 20 crores if the unorganized sector is considered, and advised CMIE to "reconsider their sample" as they, allegedly, did not take into account the workers travelling to their native places.
Prof. Kumar also warned of the threat of deflation in the post-COVID-19 society. He suggested that the Government Issue COVID-19 bonds to raise money and use liquid funds of about ₹8 lakh crores in their possession.
