Prime Minister Narendra Modi has welcomed India's 7.8% GDP growth in the latest quarter, saying the strong growth shows that the economy is doing well. The Congress, however, has questioned the figure and said the headline growth number does not show the full picture of the economy.
Speaking to NDTV's Shiv Aroor, Sanjeev Sanyal, member of the Prime Minister's Economic Advisory Council, said the 7.8% growth was "very strong", especially at a time when the world economy is facing several challenges.
Sanyal said the growth was not coming from just one part of the economy. Manufacturing, construction and services were all doing well. The financial sector was also performing strongly and the investment in the economy also increased by 12%.
"The sources of this growth are actually quite interesting to see because it's not from just any single source. You have had manufacturing growth doing well. You also see construction. The services sector is always strong, but you can see the financial sector doing very well," Sanyal said.
He added, "It's very broad-based. It's driven not just by consumption, as many people tend to accuse India's economy. That's consumption-driven growth."
Sanyal rejected the criticism that India's manufacturing sector was struggling. He pointed to sectors such as steel, cement, pharmaceuticals and smartphone manufacturing. He said India is now the world's second-largest steel producer after China and is well ahead of the US, which is third.
He also pointed to car sales as another sign of strong domestic demand. He said this is happening even as car sales in China have fallen. "India's car sales have risen significantly, while domestic car sales in China have fallen by around 20%," he said.
The Congress suggested people look beyond the 7.8% GDP figure and ask where the jobs are. It has also pointed to the agriculture sector.
Responding to the criticism, Sanyal said official figures show that unemployment has been falling in both rural and urban areas. However, he admitted that unemployment among educated young people remains a serious concern.
"This is an area that we really do need to work on," he said. Sanyal said the problem is not limited to India. China is also facing high unemployment among educated young people, he said.
The economic advisor said India's education system needs to change because traditional classroom-based education is no longer enough. He said young people often have theoretical knowledge but lack work experience which makes it harder for them to find jobs
He further stated that students should be able to gain work experience while studying. Colleges should work more closely with companies, while apprenticeships and skill training should become a bigger part of education.
The Prime Minister, meanwhile, has also urged people to avoid spending unnecessarily on gold, foreign holidays and destination weddings. He asked Indians to holiday and hold weddings in India, buy local products and avoid unnecessary gold purchases.
"From an individual perspective, it may look like an investment. But from a national perspective, it is consumption," Sanyal said, adding, "A lot of capital gets stuck into it, which could be better mobilised for doing other things."
