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

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A New Question Mark on India’s GDP Series

Is the complexity of national income estimation beyond the current government’s ken?

 

The Central Statistics Office’s (CSO) new gross domestic product (GDP) series—introduced in 2015—has brought into use many significant firsts such as the United Nations’ System of National Accounts, 2008 guidelines. Following this procedure, the private corporate sector’s (PCS) contribution to domestic output is estimated using the data from their financial returns—statutorily filed with the Ministry of Corporate Affairs (MCA)—which revealed some startling results. The PCS’s share in domestic output was enlarged, and the GDP growth rates were significantly higher than those reported previously.

The elevated growth rates, however, failed to carry public conviction, since the higher growth rates are out of line with the macroeconomic correlates, and the GDP revisions—especially the use of the MCA’s corporate database (MCA 21)—have encountered widespread scepticism. Estimating corporate GDP by a simple aggregation of firm-level value addition, based on audited financial reports available from the government’s e-portal, is not only an oversimplification of methodology, but also reflective of the indifference of the current government to the complexity of the issue.

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Updated On : 22nd May, 2019

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