2017-18 not the best base year for GDP, says govt panel

The government is reportedly looking at 2017-18 as the new base year for GDP but a decision is yet to be made as the expert committees are still awaiting some more data

The Advisory Committee on National Accounts Statistics has recommended that 2017-18 is not an appropriate year to be used as the new base year for GDP. The government currently follows the base year of 2011-12.

Until today's announcement, the Ministry of Statistics and Programme Implementation (MOSPI) was believed to be considering 2017-18 as the new base year. MOSPI Secretary Pravin Srivastava had recently said the decision to change the base year (of GDP) would be taken in next few months after the release of the Annual Survey of Industries and the Consumer Expenditure Survey.

Meanwhile, several experts have cautioned against selecting 2017-18 as the new base year for GDP. It was a turbulent financial year which saw the impact of GST and demonetisation.

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Former chief statistician Pronab Sen has said that changing the base year to 2017-18 could see a downward revision in the GDP during PM Narendra Modi-led government's first tenure (2014-2019), especially in the post-demonetisation year. The low base during the Modi government's first tenure will make, at least statistically, the current 2019-2024 term growth look better.

C Rangarajan, former RBI governor, also thinks 2017-18 is not a normal year because of the impact of demonetisation and GST. Rangarajan says the government would run into a problem if it chooses a low-income year of 2017-18.

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PC Mohanan, Former Chairman of National Statistical Commission, says his main concern is about the MCA21 which substantially raised the share of manufacturing GDP and reduced that of the services GDP. This dataset is not in the public domain yet and the questions that the NSSO's April 2019 report raised about its quality has to be sorted out and settled to the satisfaction of experts before being used again.

Meanwhile, the government has decided not to release the consumer expenditure data for financial year 2017-18, citing data quality issues. Conducted by the National Statistical Office (NSO), the Household Consumer Expenditure Survey is a key element in rebasing GDP and other macro-economic indicators.

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