NEW DELHI :
Pronab Sen, country director of the International Growth Centre (IGC), had a long and distinguished career in the government as the principal adviser in the Planning Commission, the first chief statistician of India as well as the chairman of the National Statistical Commission. In an interview, Sen spoke about the state of the economy, the challenge before the 15th Finance Commission and the controversy surrounding India’s statistical system. Edited excerpts:
The economy grew at 4.5% in the second quarter. Where do think it is headed? Has it bottomed out?
No, not yet. The effect on the corporate sector began only late last year. So we are still seeing the process unfolding. This is unlikely to bottom out for at least the next few quarters.
Do you mean to say GDP growth will go down further?
It depends. The optimistic way of looking at it is prior to the downturn that we are seeing in the GDP numbers, we knew that the non-corporate sector was doing badly but the corporate sector was doing well. Now the hope is the non-corporate sector is picking up, but my sense is that is going to take time because the financial sector is in trouble and their willingness to extend credit to non-corporates is pretty low. But it that happens, then the whole process of employment generation and consumption revival should start. But it is not going to happen in next few quarters.
For the corporate sector, the government announced the big bang corporate tax cut to…