New Delhi – India's recent revision of its Gross Domestic Product (GDP) base year has received strong backing from former top statisticians, who affirm the robustness of the updated methodology. This comes amid scrutiny following the release of Q1 fiscal year GDP estimates, which indicated a 7.8% growth.
TCA Anant, a former Chief Statistician who oversaw the last base year revision, praised the current exercise as a "very good effort" for its comprehensive use of diverse data sources. "This base year revision has been a comprehensive exercise, and the methodology is very robust," Anant stated, noting that while GDP growth rates grab headlines, the absolute GDP figures are calculated with significant diligence.
Ashish Kumar, former Director General of the Central Statistical Organisation (CSO) and now President of the Center of Data for Economic-Decision making, echoed Anant's sentiments. Kumar underlined the integrity of the new GDP series' methodology, dismissing any criticism as "baseless" and asserting that the numbers provided by the Ministry of Statistics and Programme Implementation (MoSPI) are grounded in the most current available data.
Why Revisions Are Standard Practice
Both statisticians highlighted that base year revisions and methodological updates inherently lead to changes in past estimates. This is not a new phenomenon; previous exercises have also resulted in significant reviews of economic figures.
- The 2011-12 base year revision, released in January 2015, notably revised India's real growth for FY14 to 6.9% from an earlier estimate of 4.7%.
- Similarly, GDP growth for FY13 was adjusted upwards from 4.5% to 5.1%.
- The 2004-05 base revision also saw growth estimates altered, with FY07's GDP growth moving from 9% to 9.2%.
These historical precedents, according to Anant and Kumar, demonstrate that adjustments are a natural consequence of updating the economic framework, rather than an indication of flawed data.
Enhanced Data Sources for Better Accuracy
A key aspect of the current revision is the integration of newer, more comprehensive data sources. These include:
- Periodic Labour Force Surveys (PLFS)
- Annual Survey of Unincorporated Sector Enterprises (ASUSE)
- Goods and Services Tax (GST) data
- Public Finance Management System (PFMS) data
- E-vahan data (related to vehicle registration)
These sources are valued for their broad coverage and shorter time lag, enabling a more accurate and timely assessment of economic activities across various sectors. The government has also publicly defended the data, emphasizing that all sources utilized are within the public domain.
Kumar further clarified that GDP should primarily be viewed as a measure of economic activity, rather than a direct indicator for assessing employment levels or citizen welfare, distinguishing its specific statistical purpose.