N K Singh, Chairman of the 15th Finance Commission, on Tuesday said the IMF's decision to revise India's potential growth forecast downwards to 6 per cent citing the coronavirus pandemic is a "gross under estimation" and observed that calculations of growth potential are always problematic.
Speaking at a virtual discussion on 'Financing For Development' organised by the Institute for Studies in Industrial Development (ISID), he also said there was a need to ensure that those who escaped poverty do not go back into poverty on account of exogenous factors like the pandemic.
"The issue of our medium term growth potential projected by the IMF last week by recaliberating it from 6.25 per cent to 6 per cent, in my view, is gross under estimation.
"Calculations of growth potential are always problematic," he said.
Last week, the International Monetary Fund (IMF) revised India's potential growth forecast downwards to 6 per cent citing the pandemic.
India's growth is projected at 9.5 per cent in financial year 2021-22 and 8.5 per cent in FY 2022-23, reflecting base effects and strong global growth, he said.
Potential growth is the rate of growth that an economy can sustain over the medium term without generating excess inflation.