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Rejecting the criticism of GDP back series data, Finance Minister Arun Jaitley said the data is realistic and is prepared by a credible organisation. Jaitley was reacting to the comments made by the former Finance Minister and senior Congress leader P Chidambaram.
The Central Statistical Organisation (CSO) released the new back series data on Wednesday showing India’s economic growth rate at an average 6.7 per cent during the Congress-led UPA regime versus 7.3 per cent under the present government. Previous numbers had put the average growth rate during the 10-year UPA rule at 7.75 per cent.
After the release of the new data, Chidambaram tweeted, “NITI Aayog’s revised GDP numbers are a joke. They are a bad joke. Actually they are worse than a bad joke. The numbers are the result of a hatchet job.”
Responding to the tweet, Jaitley on Thursday said what was welcomed by the UPA in 2015 in now being criticised in 2018 because it revises it downwards. “The CSO is a highly credible organisation, it maintains an arms length distance from Finance Ministry. In fact, we also come to know of the data only when it is released,” he said adding that all former individuals and eminent people who headed the CSO are of the same opinion that “this data is far more inclusive and far more reflective of the situation of Indian economy and therefore has far greater credibility.”
New formula
In February 2015, the CSO worked on a new formula with 2011-12 as the base year and the new GDP series was announced. At that time it had revised the new GDP series from 2012-13 onwards. Since then, all GDP data, whether quarterly or annual, are based on the new series.
Jaitley said the new series is globally more comparable, it takes into account a far greater representation of the Indian economy and is more reflective of the real state of the economy. According to Jaitley, when in 2015 the data was released it revised the GDP growth in the last two years of UPA government that is 2012-13 and 2013-14. Curiously, at that time the revision had made the GDP growth move upwards. So there was an improvement in those two years. This was welcomed by the people in the then government.
“In fact, they said that the new GDP series has concludedly established that we did not mis-manage the economy,” he said adding that the new series has been made applicable from 2004-05. Accordingly, the growth on the basis of new series may be revised upward or downward depending on the applicability of the data.
No different yardsticks
Jaitley categorically said that there cannot be two different periods with two different yardsticks. “Now based on the same yardstick, for the earlier 8 years of UPA, the GDP has been revised downwards. So you gain in some years and lose in some years. Data is realistic, it is not fictional. And this formula is globally more comparable,” he said.
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