Parliament panel quizzes credibility of new GDP nos

 A Parliamentary committee has raised questions on the credibility of economic growth figures calculated on the basis of new base year (2011-12) , saying it has shown sudden jump on economic growth rate which contradicts anecdotal evidence.

The Parliamentary Standing Committee on Finance has therefore suggested a revision of national accounts annually rather than once in five years to avoid controversies “The new series of national accounts with 2011-12 as base year has raised more questions than answers ... The reply of the ministry regarding authenticity and creditability of new series is also vague,” the committee said in a report tabled in Parliament recently.

Anecdotal evidence

“The committee is not convinced regarding the credibility of the figures which are showing a sudden jump in the growth rate of various sectors of economy including gross domestic product (GDP) growth rate from one per cent to 1.5 per cent, capital formation from -3 per cent to +3 per cent, which seem to contradict anecdotal evidence,” states the report. The committee said the reply by the statistics ministry on authenticity and creditability of new series is also "vague".

Before this two key officials Chief Economic Advisor Arvind Subramanian and RBI Governor Raghuram Rajan have raised questions on the data by the Central Statistics Office estimated the real GDP growth at 7.4 per cent in 2014-15 and 6.9 per cent in 2013-14.
The Parliamentary committee suggested the ministry to examine the possibility of revising the national accounts annually to pre-empt the kind of controversies and debates that being generated right now.