Balancing growth with employment
There is a strong connection between interest rates on the one hand, and employment and growth on the other
Recently, the gross domestic product (GDP) growth rate in the first quarter of the current fiscal year was released: at 7%, it was marginally slower than expectations. This apart, both the central bank and the chief economic advisor (CEA) seem to have reservations about the revised methodology recently adopted, partly because there is little segmental, micro level data supporting the number: growth in bank credit to industry has slowed down; both top and bottom lines of the corporate sector as reflected in quarterly results are unexciting. Agricultural growth is negative and it is the services sector which accounts for the reported growth. Economist Ashoka Mody was scathingly critical of the new methodology in his blog for creating “the dangerous illusion that India’s GDP is growing rapidly".