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Rediff.com  » Business » GDP grew in double digits twice in UPA era, but slowed down too

GDP grew in double digits twice in UPA era, but slowed down too

August 20, 2018 10:57 IST

Data on the new series given by a panel on real sector statistics shows that GDP grew by 10.23 per cent in 2007-08 and 10.78 per cent in 2010-11. There are some years for which the new figures show a deceleration in growth as well. 

The new series has 2011-12 as the base year while the earlier series had 2004-05 and 1993-94.

Photograph: Jitendra Prakash/Reuters

The Indian economy grew in double digits twice during the tenure of the Manmohan Singh government (2004-14), shows the back-dated data on the new series of gross domestic product given by a panel on real sector statistics.

 

The data showed that GDP grew by 10.23 per cent in 2007-08 and 10.78 per cent in 2010-11 against the earlier numbers of 9.32 per cent and 8.91 per cent, respectively.

The new series has 2011-12 as the base year and the earlier series 2004-05 and 1993-94.

However, there are some years for which the new figures show deceleration in growth. For example, growth stood at 4.15 per cent, according to the new numbers, against the earlier 6.72 per cent in 2008-09, when the global financial meltdown had ripple effects on India.

Officials of the ministry of statistics and programme implementation, which released the report, said the data provided by the panel was "indicative" and the National Accounts would work out the final numbers based on these figures in three-four weeks.

The back series data is now tentatively available for GDP going back to 1994-95, to be in line with the new series from 2011-12 onwards.

Image Courtesy: Business Standard

The committee on real sector statistics is headed by Sudipto Mundle, who is former acting chairman of the National Statistical Commission and member of the Fourteenth Finance Commission.

The panel used two methods to generate GDP back-series.

'One approach is broadly based on the new GDP methodology by using the base data wherever available (such as MCA-21 data, which is available from 2007-08). Another method is based on production shift approach,' the report states.

N R Bhanumurthy of the National Institute of Public Finance and Policy, who is a member of the committee, said: "We have taken the available base data and then back-calculated. We have taken the difference between old series and new series and then sliced it backwards."

Former chief statistician Pronab Sen said the differences between earlier estimates of GDP growth and the new back series were on expected lines. The new numbers show higher growth for 2004-05 to 2007-08 than the older series, which was expected, he said.

The bigger slowdown during the global financial crisis was also expected, he said.

He attributed the differences primarily to the way services sector numbers are calculated.

Now, these are based on MCA-21, a portal where companies file statutory returns online.

Some of the differences between GDP growth estimated earlier and now are because expansion is calculated at market prices under the new series, which largely includes indirect taxes. Earlier, growth was calculated at factor cost, which excludes indirect taxes.

To avoid this confusion, the back-series data also gave numbers at factor cost, using the new methodology and back series data at market prices.

Economists say ideally market prices should be compared with market prices and factor cost with factor cost.

Mundle said that was why back-dated and new series numbers were given at both market prices and factor cost.

Photograph: Reuters.

Arup Roychoudhury and Indivjal Dhasmana
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