After junking the gross domestic product (GDP) numbers released by a government panel, the Central Statistics Office (CSO) on Wednesday came out with official back series data that shows economic growth was higher under Prime Minister Narendra Modi’s government than in the previous Congress-led United Progressive Alliance (UPA) regime.
According to this set of data, India’s GDP grew at an average of 6.7 per cent in nine years of the UPA regime, 2005-06 to 2013-14, in comparison to growth under the current National Democratic Alliance government, which stands at 7.3 per cent. GDP growth for all years prior to 2010-11 has been revised downwards.
This is contrary to the upward revision in previous years that the report prepared by a committee of the National Statistical Commission had demonstrated. The committee, in fact, showed two years under the UPA regime, 2007-08 and 2010-11, reporting double-digit growth.
The current revision for the 2004-05 to 2010-11 period was done “largely with the same methodology”, but using a “hybrid approach” based on the availability and completeness of requisite data, the Ministry of Statistics and Programme Implementation (MoSPI) said in a release.
“It was an intense statistical exercise, since it involved using data from newer surveys on the unorganised sector and a new series of consumer and wholesale price indices with the base year 2011-12,” said Rajiv Kumar, vice-chairman of NITI Aayog. Chief Statistician of India Pravin Srivastava was also present at the event.
“This is a recalibration of the entire economy, using a scientific method. It is akin to looking at the economy with different lenses, with the focal length changing according to the revised parameters,” said Srivastava.
The MoSPI had called off the release of this data two weeks ago. Sources said there has been no change in the data since. “The data was held only to strengthen the explanation of the downward revision,” said a source.
Among the major sectors, growth rates of primary (agriculture and mining) and secondary (industry) sectors were revised to a comparatively modest extent, as compared to the services sector.
Growth rates of services, or the tertiary sector, were revised downwards to a greater extent in each of the previous years. For example, the growth in industry was revised upwards from 12.7 per cent to 14.7 per cent in 2006-07.
In the same year, growth in primary sector was revised downwards from 4.6 per cent to 3.2 per cent, while that in services sector was revised from 10.1 per cent to 7 per cent.
The reason, the report said, is that newly available data was used for estimation.
One of the reasons was using data from sales tax operations instead of the gross trade income (GTI) index that dated (1999-00).
In the back casted series, a new sales tax index has been used, which is based on survey estimates of 2010-11.
In addition, the telecom sector product was overestimated since it used the growth in number of subscribers as the proxy. In the back series, minutes of usage was taken as representative of growth, which pulled down growth.
The estimation of value added in the financial services sector was also changed, wherein the contribution of the Reserve Bank of India (RBI) has changed to a “non-market approach”, reducing the contribution of RBI to the gross value added (GVA).
Experts said the downward revision in primary sector growth was due to overestimation of value added in the mining, trade and informal sectors.