Former NITI Aayog CEO Amitabh Kant has strongly defended India's latest Gross Domestic Product (GDP) estimates and the government's revised methodology for calculating them. Kant emphasized that direct comparisons between GDP figures derived from different base-year series are inappropriate and can result in significant misinterpretations.
Understanding the 'Apples to Oranges' Analogy
Kant articulated that GDP data from various series should not be directly compared because the underlying methodology and data frameworks undergo crucial changes. He pointed out the distinction between estimates under the 2011-12 series and the new 2022-23 series, stating that such comparisons are akin to "comparing Apples to Oranges."
For instance, he noted that the GDP for the first quarter of the current financial year was estimated at approximately ₹75 lakh crore (or ₹80 trillion) under the GDP rebasing framework, in contrast to ₹81 lakh crore under an older calculation. This yields a real growth rate of around 7.8%.
Why Methodology Revisions Are Essential
The former NITI Aayog chief drew parallels to the controversy surrounding the introduction of the 2011-12 GDP series in 2015. He stressed that regular changes in methodology are vital to accurately capture the evolving structure and dynamic nature of the Indian economy. Since 2015, India has witnessed substantial economic transformations, including the widespread adoption of digital payments, the implementation of the Goods and Services Tax (GST), and increased overall digitization.
Addressing Discrepancies in Estimates
Kant further clarified differences observed in advance estimates for future fiscal years. For FY26, the first advance estimate (FAE) under the 2011-12 series projected GDP at ₹201 lakh crore, while the new series' second advance estimate placed it at ₹322 lakh crore. He clarified that this substantial difference does not imply a sudden 60% economic growth but rather reflects the comparison of data calculated using two distinct methodological approaches.
Even nominal GDP estimates show variations between the old and new methodologies. The FY26 estimate, for example, stood at ₹357 lakh crore under the old method versus ₹345 lakh crore under the new. Kant reiterated that such differences do not signify an economic contraction but merely an updated calculation framework.
The Importance of Context in Economic Data
The core of Kant's defense lies in the necessity of contextualizing economic data. He argued that without understanding the methodological shifts, any direct comparison of GDP figures across different series will inevitably lead to inaccurate conclusions and unnecessary debate. The revisions are a continuous process aimed at providing a more precise and contemporary reflection of India's economic performance.