Government has debunked claims by former Chief Economic Advisor Arvind Subramanian that India's GDP growth estimate has been exaggerated by 2.5 per cent. The Ministry of Statistics and Policy Implementation argued that due procedure has been followed in calculating the GDP estimates.
"The GDP estimates released by the Ministry are based on accepted procedures, methodologies and available data and objectively measure the contribution of various sectors in the economy," the Ministry said in a statement later on Tuesday.
In his recent research paper published at Harvard University, Subramanian had pegged actual GDP growth of India at around 4.5 per cent, as against the official estimates of nearly 7 per cent growth between 2011-12 and 2016-17, a period that spans both UPA and NDA regimes.
Opposing these claims, the ministry assured that its GDP estimates are broadly in line with "the GDP growth projections brought out by various national and international agencies".
The government emphasised that it is necessary to revise the base year of macroeconomic indicators like Gross Domestic Product (GDP), Index of Industrial Production (IIP), Consumer Price Index (CPI) etc periodically to ensure that indicators remain relevant and reflect the structural changes more realistically.
"With any Base Revision, as new and more regular data sources become available, it is important to note that a comparison of the old and new series is not amenable to simplistic macro-econometric modelling," the ministry further added.
The former CEA's analysis has been based upon 17 key economic indicators for the period 2001-02 to 2017-18 with a higher interdependence with the GDP growth. Meanwhile, the deduction in the paper does not comprise the controversial MCA-21 database which is an innate component of the CSO's computation.
Subramanian however, has asserted that his findings have key implications. "The Indian policy automobile has been navigated with a faulty, possibly broken, speedometer," he said in the report.
The reliability of the financial numbers presented by the Modi government has been questioned before in its previous term.