Revised GDP growth rate: Congress says Modi govt making two plus two equals to eight

Back in August the Modi government had faced considerable embarrassment when back series data on GDP suggested that the economy grew at a faster pace under the UPA government

Back in August the Modi government had faced considerable embarrassment when back series data on GDP, prepared by the Committee on Real Sector Statistics, suggested that the economy grew at a faster pace under the UPA government - with the 10 year average at 8.1% - against 7.3% by the current government.

The current government had then dismissed these results as "experimental results" and has now followed it up by releasing revised GDP data for the years spanning 2005-06 and 2011-12 that has lowered the growth rate under the previous regime. The new data not only shaves off over 1 percentage point from the only year when India previously posted double-digit GDP growth post liberalisation - under former Prime Minister Manmohan Singh - but also from each of the three years (FY06-FY08) that had shown expansion of over 9%.

By recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the Central Statistics Office (CSO) has now estimated that India's GDP grew by a much slower 8.5% in FY11 against a previously estimated peak of 10.3%. The average growth for the UPA years after the back series revision for FY06 to FY12 declines to 6.82% from 7.75% earlier. Significantly that's well below the 7.35% growth posted during the four years of the Modi government.

"Congress and P Chidambaram's only argument that our growth was better than yours stands demolished when brought on par, basis GDP growth measured by new series, over the UPA and NDA eras!" BJP Party tweeted on its official Twitter handle.

At a joint press conference along with Chief Statistician Pravin Srivastava, Niti Aayog Vice-Chairman Rajiv Kumar yesterday said that the variation in the two sets of GDP numbers was due to the recalibration of data in certain sectors of the economy, including mining, quarrying and telecom.

"A complex exercise has been carried out by the Ministry of Statistics and Programme Implementation to update the National Accounts Series. The new series has made significant methodological improvements," Kumar said. He added that the New Series, with its supporting back series, is "internationally comparable and in sync with UN Standard National Account". It's worth mentioning here that the government had moved to a new base year of 2011-12 from the earlier 2004-05 for national accounts in January 2015.

When asked whether it was a coincidence that only UPA tenure GDP numbers were revised downwards, Kumar replied in the negative. "No it was not a coincidence. It was a matter of hard work done by the CSO officials who had taken the pain to do all the recalibration of economy that they have done," he said, pointing out that the methodology adopted has been vetted by leading statisticians.

According to Kumar, the government has no intention to "mislead or try and do something purposefully" which does not reflect the reality. But nobody has missed that the new GDP figures come bang in the middle of Assembly elections and a few months ahead of the 2019 general elections. So, naturally, the Opposition has unleashed a war of words protesting the revised data.

Senior Congress leader and former finance minister P. Chidambaram took to Twitter yesterday to criticise the figures. "Niti Aayog's revised GDP numbers are a joke. They are a bad joke," read one tweet, followed by, "Actually they are worse than a bad joke. The numbers are the result of a hatchet job." He also questioned whether the National Statistical Commission had been disbanded as it did not calculate these numbers and suggested that it was time to "wind up the utterly worthless body", referring to the think-tank.

Responding to Chidambaram's comments, Niti Aayog's Kumar tweeted: "It would be far more in keeping with your acumen to give us details of why the new back-series data is wrong than merely to assert that they are wrong. I challenge you to prove them to be technically deficient."

Meanwhile, Congress chief spokesperson Randeep Surjewala termed the step a "classic" case where "the operation is successful but the patient is dead". In a statement he further claimed that the revised data "reflects the desperate attempt of a defeatist Modi Government to undermine India's growth story over last 15 years. Modi Government and its puppet Niti Aayog want the people to believe that 2+2=8. Such is the gimmickry, jugglery, trickery and chicanery being sold as back series data".

Branding the new GDP data as "Excel sheet management" Surjewala added that the move "has completely undermined the NSC (National Statistical Commission), the autonomous body for deciding data transparently and in accordance with global standards of calculating GDP as per Market Price Linked Methodology".

The UPA vs NDA debate notwithstanding, according to independent experts the new GDP numbers do not alter the overall trajectory. "Directionally, the new series is similar to the old series, which suggests that the latter was not misleading the policymakers on whether the pace of growth was accelerating or slowing down," Aditi Nayar, principal economist, ICRA, told the Economic Times.

In a similar vein, Devendra Kumar Pant, chief economist, India Ratings, pointed out that the revised data shows minor change. "Even this data shows deceleration in investment rate from 39.8% in FY11to 30.6% in FY18 and decline in gross savings rate to 29.6% in FY17 from 36.2% in FY11. These are major economic challenges which Indian economy is currently facing," he explained.

However, according to former chief statistician TCA Anant, the changes are quite substantial and based on data related to hotel, retail and wholesale trade. "When we got final trade survey based data in 2010-11 from NSS survey, we found trade estimates in old series were significantly overestimated," he said.

With PTI inputs

(Edited by Sushmita Choudhury Agarwal)

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