In a 25-minute interview to Karan Thapar for The Wire, Jahangir Aziz illustrated his point with the analogy of a car whose speedometer only reflects what the speed was 4 hours ago rather than the actual speed of the moment. This means the car driver will not know whether he is accelerating or slowing down. Consequently, he will not know whether to press the break or the accelerator. Just as the driver will be acting without knowing the reality of the situation he faces, so, too, India’s government and Finance Ministry, in particular, take economic action and measures without knowing the true state of the economy.
In The Wire interview Jahangir Aziz illustrated his argument with two very telling examples.
First, he said whereas the government believes growth in Q3, calculated on a Year on Year basis, is 0.4%, his bank, J P Morgan, has done a Quarter on Quarter calculation and that shows growth in Q3 was 5.7%. Not only is that a huge difference of over 5% but it also means the government does not appreciate how well the economy performed in Q3.
