Author and columnist Surjit Bhalla has strongly refuted allegations that India's GDP data is manipulated, calling such criticism "the stupidest" directed at the country's economic policymaking. In an interview with ANI, Bhalla, a former part-time member of Prime Minister Narendra Modi's Economic Advisory Council, asserted that there is no credible evidence to support claims of GDP figure tampering.
Bhalla Defends India's Statistical System
"I think they're talking garbage," Bhalla said when responding to critics who question India's official GDP data. He defended the country's statistical framework, stating, "We have one of the best statistical systems in the world and in particular on GDP. Now, that is not to say that we are perfect... We've just had two major innovations... So, you know, the larger question is, do we fudge? And there is no evidence."
Bhalla highlighted that he had previously examined the issue in response to similar criticisms and found methodological flaws in the critics' approach. "In my study, I addressed this on Arvind Subramaniam back in 2019, that his method of assessing whether you're fudging the GDP... according to his method, Germany was the one fudging the most," he explained.
Impact of Unfounded Allegations on Reforms
According to Bhalla, repeated allegations of manipulated GDP data divert attention from genuine reforms needed in India's statistical system. "It is precisely because of criticism like, that governments get away easy because it's so easy to suggest that's wrong... We don't get reforms because of it," he said, pointing to recent improvements in the Industrial Production Index and GDP estimation methodology.
Drawing comparisons with neighboring countries, Bhalla noted that India's record on revising GDP estimates has been far more conservative. "I took Bangladesh, Pakistan, Sri Lanka and India... Our cumulative upgrading of GDP was 8 per cent over 50 years. What was the cumulative GDP upgrading of Bangladesh? Sixty-plus per cent. And Sri Lanka, 35 per cent," he stated.
India's Market Size Overrated
Bhalla also challenged the commonly held belief that India's $4 trillion economy automatically makes it one of the world's largest consumer markets. "This idea that we have a large market... India's GDP is 4 trillion. California's GDP is 4 trillion. So we are not, let me just make it explicitly clear, we are not a large market. We are a very small market," he said.
Explaining his argument, Bhalla said India's aggregate GDP masks the country's relatively low per capita incomes. "Because in this 4 trillion... there are lots of poor people, lower middle-class people, etc. So that comes into the GDP. But it's not a signifier of wealth, of status, income status," he elaborated.
Need for Global Competitiveness
Bhalla argued that policymakers and industry must abandon complacency based on the assumption that India's domestic market alone can sustain growth and instead focus on creating globally competitive industries. He contrasted India with countries such as Vietnam and Bangladesh, which do not assume they are large markets but provide strong incentives to attract foreign investment.
"Does Vietnam think they are a big market? No. Does Vietnam provide excess benefits to FDI? Yes. Does Bangladesh provide excess benefits to FDI? Yes. Do we provide? No, we want to tax them. That's our attitude," Bhalla said.
While stressing that India has made remarkable economic progress over the past three decades, Bhalla maintained that the country could achieve much faster growth if it pursued more ambitious reforms. "We've done absolutely brilliantly well over the last 35 years... I'm very proud of the fact we've done incredibly well. And I'm very disappointed with the fact that we can do better," he concluded.
