Centre defends methodology after former CEA Arvind Subramanian says GDP growth figures 'overstated'

-The Indian Express

Arvind Subramanian, in an article published by The Indian Express, said his research found that the actual annual growth rate may have been about 4.5 per cent, below the official estimates of 7 per cent.

New Delhi:
The Gross Domestic Product (GDP) growth estimates are based on accepted “procedures, methodologies, and available data”, the Centre said on Tuesday after former Chief Economic Advisor Arvind Subramanian, in an article published by The Indian Express, said the projections between 2011-12 and 2016-17 were “overstated by 2.5 percentage points per year”.

Subramanian said his research, published by Harvard University, found that the actual annual GDP growth rate may have been about 4.5 per cent, below the official estimates of 7 per cent.

The Ministry of Statistics and Programme Implementation (MoSPI), however, disagreed with the findings saying Subramanian’s overestimation of India’s GDP growth is primarily based on an analysis of indicators, like electricity consumption, two-wheeler sales, commercial vehicle sales using an econometric model and associated assumptions.

“The estimation of GDP in any economy is a complex exercise where several measures and metrics are evolved to better measure the performance of the economy,” the MoSPI said in a statement.

With any base revision for GDP estimation, as new and more regular data sources become available, it is important to note that “a comparison” of the old and new series are not amenable to simplistic macro-econometric modelling, it said.

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The Indian Express, 11 June, 2019, https://indianexpress.com/article/business/centre-defends-methodology-after-former-cea-arvind-subramanian-says-gdp-figures-overstated/

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