New Delhi, June 11: With former Chief Economic Adviser Arvind Subramanian accusing the Prime Minister Narendra Modi-led Union government of overestimating GDP growth by about 2.5 per cent, the Ministry of Statistics & Programme Implementation had come with a clarification on Tuesday stating that revised rates of GDP growth are based on accepted procedures, methodologies and available data and objectively measure the contribution of various sectors in the economy.
Making the clarification on the 'overestimated' GDP growth data, the Union Ministry in its clarification wrote, "Reports have appeared in a section of media citing Dr Arvind Subramanian as regards overestimation of India’s GDP growth, primarily based on an analysis of indicators, like electricity consumption, two-wheeler sales, commercial vehicle sales etc using an econometric model and associated assumptions." Narendra Modi Government Overestimated GDP Growth Rate, Claims Ex-CEA Arvind Subramanian
Citing the System of National Accounts 2008 (2008 SNA) which was adopted by the United Nations Statistical Commission (UNSC) in 2009, the Union Ministry of Statistics & Programme Implementation stated that for diverse economies like India, data requirements take time from relevant data sources -- before they can be fully aligned with the SNA requirements.
Read the Full Statement Here.
Adding on, it stated that in the absence of these requisite data, alternate proxy sources or statistical surveys are used to estimate the contribution of various sectors to the GDP. The report further stated that with structural changes in place, revision of base year of macroeconomic indicators like Gross Domestic Product (GDP), Index of Industrial Production (IIP), Consumer Price Index (CPI) etc are necessary. This ensures indicators remain relevant and reflect the structural changes more realistically. Narendra Modi Govt's GDP Surge Claim Dubious, 36% of Firms in Database 'Untraceable or Misclassified': NSSO Report
The statement added that the Base Year of the GDP Series was revised from 2004-05 to 2011-12 and released on 30 January, 2015 after adaptation of the sources and methods in line with the SNA 2008 and the methodology to compile these data were discussed in detail by the Advisory Committee on National Accounts Statistics (ACNAS) comprising experts from academia, National Statistical Commission, Indian Statistical Institute (ISI), Reserve Bank of India (RBI), Ministries of Finance, Corporate Affairs, Agriculture, NITI Aayog and selected State Governments.
The Ministry informed that decisions taken by these Committees were unanimous and collective after taking into consideration the data availability and methodological aspects before recommending the most appropriate approach. It said that India subscribed to the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF) and an Advance Release Calendar for release of estimates. IMF's Gita Gopinath Says India Must ‘Transparently Communicate’ Its Growth Numbers.
Earlier on Tuesday, reports were out in which ex-CEA Subramanian had claimed that the actual average annual growth between 2011-12 and 2016-17 may have been about 4.5 per cent, not seven per cent, as claimed by the ruling dispensations - be it Congress-led UPA or BJP-led NDA. Referring to the research paper, the former CEA to PM Modi - between 2014-2018 - said, as NDTV reports, "The Indian policy automobile has been navigated with a faulty, possibly broken, speedometer." India’s GDP Expected to Expand 7.5 Per Cent in 2019–20: World Bank
Attributing the overestimation to 'methodological changes' and assertations as non political, Subramanium had said, "My new research suggests that post-global financial crisis, the heady narrative of a guns-blazing India - that statisticians led us to believe - may have to cede to a more realistic one of an economy growing solidly but not spectacularly."