PM Modi, Finance Minister Arun Jaitley do not know economics: Subramanian Swamy

BJP MP Subramanian Swamy on Saturday claimed neither Prime Minister Narendra Modi nor Finance Minister Arun Jaitley knew economics, as they dub India as the fifth largest economy despite it being the third largest one. In an apparent backhanded praise, Swamy said he does not understand why the prime minister says India is the world's fifth largest economy when, as per scientifically acceptable procedures for GDP calculations, the Indian economy is the third largest after the USA and China.

"I don't know why our prime minister keeps saying the fifth largest... because he doesn't know economics, and the finance minister also doesn't know any economics," said Swamy, who has often courted controversies through his comments.

Swamy, who holds a PhD in economics from Harvard and also taught the subject there, has often been critical of Jaitley.

Noting that calculations based on exchange rates make the Indian economy fifth in the world, he said exchange rates keep on changing and owing to a devalued Rupee, India is the seventh largest economy at present, on the basis of such calculations.

The correct way to calculate the size of economy is the purchase power parity, on the basis of which India is at number three, Swamy said.

Addressing a gathering here on "Engaging People's Republic of China", he said India and China were respectively the first and second most prosperous countries in the world before invasions by colonial forces.

"We should not fluctuate from patronising them (China) like Nehru did (on one side) to the other side of hostility; we should find a common ground," he said.

Jawaharlal Nehru had refused a permanent seat offered to India in the United Nations Security Council in 1950, said Swamy, adding the country's first prime minister who was in a "sarvodaya mood" had contended that it should go to China.

Maintaining that the two large neighbours, which share between them one-third of the world's population, have the longest history between two neighbours of living in peace, he said, "We need to go back to the ancient and historic relationship between the two countries."

Observing that the two neighbours have a great potential of working together, Chinese consul general in Kolkata Zha Liyon said China has the second largest economy while India has the fifth or the third largest, depending on calculations and statistics.

Inviting Indian businesses to invest in trade, commerce and industries in the neighbouring Yunnan province, Liyon said there are opportunities in manufacturing, food processing and tourism sectors.