Page 117 - Abhivruddhi

2023 4306.3 9.7
2024 4729.3 9.8
2025 Na
2026 Na

*Source: IMF World Economic Outlook, April 2019 issue. GDP is for
calendar year in IMF data.

Section Three: Criticisms of the Initial Five Trillion Dollar Target
and Date

This statement or goal was met with criticism from many quarters
as being highly unrealistic, and also on other grounds. We shall outline
and evaluate two criticisms. Due to time and space constraints, it is
not possible to examine other criticisms. About a month after the PM’s
statement, Dehejia and Subramanya (2019) stated, “the $5 trillion goal is
a dangerous distraction for India” and stressed that real GDP per capita
is important for welfare. Their basic point that GDP per capita is more
meaningful for welfare than GDP is valid, but obvious and well known.
Their criticism is trite and unwarranted since, as explained earlier,
nominal GDP projections, which are implicitly or explicitly also goals or
targets, are needed for macro policy.
The $ 5 trillion goal can certainly be criticised for not specifying
whether it was a nominal or real GDP target. But a similar criticism also
applies to the original BRICS Reports. It needs to be mentioned that such
a criticism was not forthcoming by most economists, who instead hailed
those Reports. However, in evaluating the BRIC projections, I pointed
out, “Although not spelt out upfront, Goldman’s analysis and forecasts are
based on GDP in US dollar at market exchange rates, not at purchasing
power parity (PPP) exchange rates.” (Moorthy, 2017 Pg. 123). Further,
even with regard to measuring economic welfare, real GDP per capita,
which Dehejia and Subramanya argue in favour of, is misleading for
many reasons: omitting the value of unpaid labour, unrecorded sales etc.

It is beyond the scope of this paper to discuss in detail these issues,
covered well in Coyle (2011) etc. Indices of human development,
pioneered by Mahbub ul Haq and Amartya Sen may be far more

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