NDA juggles UPA GDP growth

NEW DELHI, NOV 29 (AGENCIES) | Publish Date: 11/29/2018 10:40:40 AM IST

The new GDP back series data - which lowers the GDP growth rate under the UPA government, has already raised a lot of political dust with Congress and opposition leadership seeing as an effort to discredit the previous government’s ‘good’ work ahead of parliamentary elections next year.

The new number has lowered the peak GDP growth rate under UPA from 10.3% in 2010-11 to 8.5%.

The average growth for the UPA years after the back-series revision for 2005-06 to 2011-12 declines to 6.82% from 7.75% earlier.

Curiously, a committee set up by the National Statistical Commission this year has come out with another set of back series data, which was ‘accidentally’ released in July this year had shown much higher GDP growth numbers under UPA government. For example, as per the committee’s data, the GDP grew at 10.8% in 2010-11 against the previously known 10.3%. The data released by the committee had shown 30-50 basis point increase in GDP growth figures compared to previously known figures.

However, the new set of numbers released by the CSO has completely reversed the trend. What is the reason for this?

 Sudipto Mundle, heads the committee on Real Sector Statistics, which among other things had come out with the back series data, which, it seems, the government has disowned for some reasons.

Mundle says the new back series data was being worked on by another sub-committee working under committee on real sector statistics. However, they did not submit their report to them following which they committee submitted its final report with it.

 According to him, they have used some data which only they had access to.

“Taking the (new) data as it is on face value, the services sector output is lower than their own old series and the share of the secondary sector was higher than the tertiary sector. What that implies is that in the subsequent year the growth rate of the secondary sector - manufacturing sector --has come down which is a cause of concern. The difference in investment rate now is sharper between its peak and the present. So that is another issue,” he explains.

However, Mundle says that the new data needs further study to understand exactly why the two old series data differ so much.

Export credit had declined sharply to Rs 22,300 crore in June 2018 from Rs 39,000 crore in the same month in 2017

 The new data not only shaves off over 1 percentage point from the only year when India previously posted double-digit GDP growth post liberalisation - under former Prime Minister Manmohan Singh - but also from each of the three years (FY06-FY08) that had shown expansion of over 9%.

By recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the Central Statistics Office (CSO) has now estimated that India’s GDP grew by a much slower 8.5% in FY11 against a previously estimated peak of 10.3%. The average growth for the UPA years after the back series revision for FY06 to FY12 declines to 6.82% from 7.75% earlier. Significantly that’s well below the 7.35% growth posted during the four years of the Modi government.

Chief Statistician Pravin Srivastava, Niti Aayog Vice-Chairman Rajiv Kumar at a press conference said that the variation in the two sets of GDP numbers was due to the recalibration of data in certain sectors of the economy, including mining, quarrying and telecom.

When asked whether it was a coincidence that only UPA tenure GDP numbers were revised downwards, Kumar replied in the negative. “No it was not a coincidence. It was a matter of hard work done by the CSO officials who had taken the pain to do all the recalibration of economy that they have done,” he said, pointing out that the methodology adopted has been vetted by leading statisticians.

However, nobody has missed that the new GDP figures come bang in the middle of Assembly elections and a few months ahead of the 2019 general elections.

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