Is the new GDP series a travesty of statistics? -Himanshu
India’s statistical system suffered credibility shocks when the GDP series was released
Last week, the NITI Aayog released the back series of gross domestic product (GDP) data on base 2011-12 for the years 2004-05 to 2011-12. The series was eagerly awaited by researchers as well as policymakers ever since the base was revised in January 2015. This release follows an unofficial release of the report of the committee on real sector statistics constituted by the National Statistical Commission (NSC). The NSC is the statutory body authorized to approve these changes and the committee’s report of July 2018 had presented one of these suggested back series.
The NSC series, with all the details provided, suggested that the overall growth rate was higher with the new series based on 2011-12 than the 2004-05 series. This was expected since a similar upward revision was seen when the 2011-12 series was launched in 2015.
But now, the NITI Aayog has come into the picture and it has presented a series which suggests that the GDP growth rate between 2004-05 and 2011-12 was actually lower on the 2011-12 base than the 2004-05 base. One implication of the revisions in back series is that the growth rate of the economy under the present government now appears to be better than that between 2004-05 and 2011-12. There is no way of inferring which of these estimates is correct without clear information on methodology. But the least that is expected is that the data is consistent with other real sector statistics. That is, it has to pass the smell test.
Unfortunately, it fails the test. There are a number of data sources on other indicators of the economy—such as credit growth, exports, investment, consumer durable sales, production assets sales and so on—which show that growth between 2004-05 and 2011-12 could not have been lower compared to the last four years if both the estimates are based on same set of data and methodology.
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