Govt defends GDP figures after Arvind Subramanian claims "growth overestimated"
New Delhi, June 12: The Centre has said that estimations of the country's economic growth are based on "accepted procedures, methodologies and available data".
The government clarifications comes hours after former Chief Economic Adviser Arvind Subramanian suggested that the figures were overestimated.
He said the actual growth figures were closer to 4.5 per cent and not 7 per cent between 2011 and 2017, over a period spanning the UPA2 and the NDA1 governments.
In a statement, the Ministry of Statistics said the estimates made are according to the 2008 SNA (System of National Accounts 2008) -- the latest version of the international statistical standard for the national accounts, adopted by the United Nations Statistical Commission in 2009.
"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 are not amenable to simplistic macro-econometric modelling... 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 statement read.
The MoSPI said 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.
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.
It may also be seen that the GDP growth projections brought out by various national and international agencies are broadly in line with the estimates released by MOSPI.
"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," it added.
The ministry stressed that with structural changes taking place in the economy, it is necessary to revise the base year of macroeconomic indicators like GDP, Index of Industrial Production (IIP), Consumer Price Index (CPI), periodically to ensure that indicators remain relevant and reflect the structural changes more realistically.
Such revisions not only use the latest data from censuses and surveys, but they also incorporate information from administrative data that have become more robust over time.