New Delhi, Aug. 19 (IANS): In the light of a controversy over back series GDP numbers published this week showing that the Indian economy performed better during previous UPA rule, the government said on Sunday that these are “not official estimates” and that the official data would be released later.
Referring to the data published in the media, the Ministry of Statistics and Programme Implementation (MoSPI) said in a statement that “these are not official estimates”.
“The estimates in the report are not official estimates and are meant only to facilitate a decision on the appropriate approach,” it said.
The MoSPI has revised the base years of the Gross Domestic Product (GDP) and the Index of Industrial Production (IIP) to 2011-12 and for the Consumer Price Index (CPI), or retail inflation, to 2012.
According to the back series data on Gross Domestic Product based on the report of the Committee on Real Sector Statistics, the Indian economy clocked a 10.08 per cent growth rate in 2006-07 under the UPA regime led by then Prime Minister Manmohan Singh, the highest since liberalisation of the economy in 1991.
The National Statistical Commission (NSC) also said in a separate statement on Sunday that the methodology for back-casting of GDP series is a “work in progress” and yet to be finalised.
The NSC had constituted a Committee on Real Sector Statistics under the Chairmanship of Sudipto Mundle in April 2017 for improvement and modernisation of the real sector database.
“It is clarified that the methodology for back-casting of GDP series has not yet been finalised and various alternative methods are being explored,” the Ministry said.
“The methodology, as also the series using the methodology, will be worked out using the suggestions made by the Committee on Real Sector Statistics and other suggestions that emanate during the consultancy process.”
According to the statement, the committee also looked at the issue of data challenges in bringing out the Back Series of GDP (Base 2011-12) as several new sources had been used in the current series, which were not available, or not reliable, in the earlier series (Base 2004-05).
The MoSPI also said that the committee approached the data challenges using different approaches. Three possible approaches were considered for generating the back series.
The recommendations of the NSC Committee will be examined by MoSPI and other experts for deciding on the appropriate methodology to be adopted for generating the back series estimates for each sector.
“The Advisory Committee on National Accounts Statistics will be deliberating on the Back Series estimates before finalising the same for continuity, consistency and reliability,” the MoSPI said.
It said that the statistical processes involved in producing such estimates are open, transparent and in line with the best international practices and standards.
“The processes and estimates are evolved after detailed deliberations in various technical committees and the recommendations placed in the public domain. Efforts have also been made to increase the sample size and use of high frequency data released by various agencies,” the Ministry said.
In a Facebook post, Finance Minister Arun Jaitley, who is currently convalescing, pointed to the global factors which helped a high rate of growth during the period in question.
Besides this, the UPA-I government had the benefit of a continuous incremental reforms from 1991 to 2004, he said.
“2003-04 witnessed the boom period for the global economy. The result was that global growth picked up. Most economies were doing well and all emerging economies started showing a high growth rate. This period continued till 2008 when the global crisis started.
“Since demand was high, exports were growing, and, therefore, for an emerging economy like India it was a great opportunity. However, when this honeymoon ended, growth started slipping down and to ensure that growth is maintained, two significant steps were taken.
“Firstly, fiscal discipline was compromised and the banking system was advised to go in for reckless lending, notwithstanding the fact that it would eventually put the banks at a risk,” he added.
Former Union Finance Minister P. Chidambaram on Sunday said that back series calculation of GDP proved that UPA I and II governments led by the Congress (2004-2014) delivered the highest decadal growth of 8.13 per cent since independence.
He said that there was a determined effort by the present BJP-led government to run down the record of the Manmohan Singh government through distortions.
The senior Congress leader said that the Modi government, in its fifth year in power, can’t match the average growth rate of UPA-I, but hoped that it could catch up with the average growth rate of the UPA-II regime.
He said that the government led by Prime Minister Narendra Modi had inherited an economy that was on the upswing.
“Unfortunately, after the first two years, the government stumbled and the momentum was lost. The main reasons were demonetisation, flawed implementation of
Goods and Services Tax and tax terrorism,” he added.Chidambaram said: “The back series data is now available. The numbers prove the dictum that truth cannot be suppressed forever, and that the truth has a way of emerging amid a torrent of lies and distortions.”
“Since this government came to power in May 2014, there has been a determined effort to run down the record of two UPA governments under Dr Manmohan Singh from 2004 to 2014,” he added.
Quoting figures from Ministry of Statistics’ data, Chidambaram said that the Indian economy’s growth under NDA-I (A.B. Vajpayee) government was 5.68 per cent, it was 8.36 per cent during UPA-I, 7.68 per cent in UPA-II and 7.33 per cent growth in NDA-II.
“A lot of confusion was sown and the Modi government added to the confusion by changing the base year from 2004-05 to 2011-12,” the Congress leader added.
Chidambaram said: “The Congress had repeatedly pointed out that when the base year was changed, the government should follow a healthy international practice and revise the numbers for the previous years too.
“We had demanded that the back series data of Gross Value Added and GDP should be calculated and released so that meaningful comparisons can be made,” he added.
He said that UPA-I and UPA-II delivered the highest decadal growth (8.13 per cent at factor cost) since independence.
“It is also a matter of record that during this period, 140 million people were lifted out of poverty. The three best years were 2005-06, 2006-07 and 2007-08. Dr Arvind Subramanian called them the ‘boom years’,” the former Minister said.
The former Minister said that the golden run would have continued but for the global financial crisis in September 2008.
“When the UPA government demitted office, economic growth had recovered to 6.39 per cent (at market prices) in 2013-14. Besides, the fiscal deficit had been reduced to 4.48 per cent and the current account deficit had been contained at 1.7 per cent.”
Chidambaram said there were other reasons why the economy stumbled during Modi government, including stagnation in investment.
“The peak Gross Fixed Capital Formation as per cent of GDP was 34.3 per cent in 2011-12. Even in 2013-14 it was 31.3 per cent. However, in the last three years, it has remained constant at 28.5 per cent. At that level of investment (GFCF), it is not possible to achieve higher growth rates.
“Yet another reason is sluggish credit growth. In 2013-14, it was 14.0 per cent. The average of four years under the Modi government is 8.27 per cent.”
Chidambaram said the Congress was a passionate advocate of high growth with equity and social justice. “All three have suffered under the Modi government,” he said.
