ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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GDP Numbers: More Puzzles, More Confusion

The Central Statistics Offi ce needs to do a lot of convincing to establish the accuracy of its new statistics.

If the National Accounts Statistics with 2011–12 as the new base year, which were released by the Central Statistics Office (CSO) in end January, raised as many questions as provided answers on the measurement of the size of the Indian economy, the advance estimates of national income in 2014–15 put out 10 days later cast a fresh set of doubts on the accuracy of the gross domestic product (GDP) numbers for the current fiscal. The CSO, based on new estimates of growth in the first three quarters, and on projections for the third quarter, says that 2014–15 will end with India showing a growth in real terms of as much as 7.4%. This will follow on the 6.9% growth in 2013–14 according to the CSO’s revised numbers, which too seemed out of touch with reality. The reason why the CSO’s advance estimates for 2014–15 have been viewed with even greater scepticism is that on the ground there are no visible signs of growth acceleration, let alone of a boom as these growth rates should imply.

Important macroeconomic indicators run counter to the CSO’s numbers for the current fiscal year. The index of industrial production (IIP) grew by only 2.1% in April–December 2014, yet GDP in manufacturing is projected to grow by as much as 6.7% in the entire year. Exports in dollar terms have grown by a meagre 2.4% during April 2014–January 2015 as against 6.4% during the corresponding period of 2013–14. The performance of corporates, as measured by net sales and profits, has also been disappointing so far.

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