- India’s GDP growth never crossed over into a ‘high-growth’ phase of above 9% in the last decade or more, new back series data from 2004-05 released by the government.
- The data also show that India’s recovery from the global financial crisis took longer than previously thought.
- The government, in 2015, changed the methodology and the base-year for the computation of its economic performance, moving towards a Gross Value Added (GVA) method from the earlier GDP calculations and bringing forward the base-year to 2011-12 from 2004-05. T
- his, however, meant that the newer estimates could not be compared with the older data.
- The back-series release provides the growth estimates for previous years using the new methodology.
- The new data release shows that GDP growth during the UPA years averaged 6.7% during both UPA-I and UPA-II.
- The old series had pegged these at about 8.1% and 7.46%, respectively.
- In comparison, the current government has witnessed an average GDP growth rate of 7.35% during the first four years of its term.
- The major takeaway from the data is that the economy doesn’t seem to have recovered from the global financial crisis as quickly as previously thought.
- Sectors such as mining and manufacturing show that the impact of the financial crisis lingered.
- The other element is that the behaviour of the mining sector, which not only affected the mining sector but also trade segment, are elements in it.
- Remember the de-coupling happened, there was a collapse in mining which happens more or less immediately post the financial crisis.
- We don’t see this in any of our data till 3-4 years later. The new series data captures that.
- The manufacturing sector shows growth falls off fairly quickly after a one-year boost after the crisis.
- The new data shows that manufacturing sector growth plummeted to 4.7% in 2008-09 and then grew sharply to 11% in 2009-10.
- Thereafter, however, growth slowed to 3.1% within two years and remained below 6% till 2014-15. The mining sector, similarly, seemingly recovered from the contraction seen in 2008-09 for a couple of years, but then again plummeted to a contraction of 17.5% in 2011-12 and didn’t cross even 1% growth till 2014-15.
- The new back series data diverges significantly from a draft report released by the National Statistical Commission earlier this year, which showed that growth during the UPA years crossed 9% on at least three occasions, and even hit 10.23% in 2007-08.
- The Statistical Commission numbers had problems with them.
- The current method is robust to the extent that instead of doing this as a purely arithmetic exercise, they tried to relate the estimates to observed indicators.
- They have used the Annual Survey of Industries (ASI) data for manufacturing, the sales tax data for trade and so on.”
- The credibility of CSO has been badly dented, not because of the data but because of the manner in which the release has been done.
