According to Ashima Goyal, a member of the RBI’s Monetary Policy Committee (MPC), the Indian economy has begun to perform well despite the unfavorable global environment since the Modi-led administration has carried out numerous reforms over the past nine years that have improved important macroeconomic indices.
Goyal argued that it is foolish to extrapolate too much from quarterly figures that are impacted by seasonal and base effects as well as measurement difficulties in response to claims made by some US-based economists that India is overstating economic growth.
India’s GDP grew by 7.8% in the April–June 2023–2024 period, the highest rate in the previous four quarters, according to data released last month. She said that the similar annual rates of growth in the previous three fiscal years were 6.6%, 9.1%, and 7.2%. She added that although the base effect is gradually disappearing, this does not indicate that growth is slowing.
Goyal noted that some Indian-origin economists working in the US had claimed that persistent structural defects were to blame for the decline in Indian growth in the 2020s, but he said that India’s strong post-pandemic recovery has disproved their claims.
Because of the increasing economic diversity, resiliency, strength, and efforts of so many Indians as well as policies that are absorbing shocks, the prominent economist claimed that Indian growth is sustainable. According to the Income or Production Approach, the real GDP of India increased by 7.8% in Q1 FY24 over the same period last year.
