FM supports new GDP data

Finance Minister Arun Jaitley on Thursday backed the Central Statistics Office (CSO) for being independent in its functioning. This comes amid some quarters expressing doubt over new gross domestic product (GDP) data.

“CSO is a credible organisation. It is not an organisation that can be controlled by the UPA (United Progressive Alliance) government or the NDA (National Democratic Alliance) government. They (CSO) do an independent exercise,” Jaitley said while replying to a debate on the appropriation Bill in the Rajya Sabha.

He said the prime minister and finance minister, too, came to know of the data when these were released. "They (CSO) don't even consult us on figures. We make our own estimations, they make their own."

Jaitley said now, the CSO included more sectors and companies in its GDP estimates. "They (CSO) believe their formulations are more internationally compatible now. So, they did not only change the basis for 2014-15, but from 2011-12," he said.

Growth for 2013-14, the last year of the UPA-II government, earlier stood at 4.7 per cent, which was later revised to 6.9 per cent. "It is not a UPA-NDA issue. They have altered their figures across the board," Jaitley said, adding understanding about the figures would improve as debate over these numbers continued.

For this financial year, the CSO has estimated GDP growth at 7.4 per cent, higher than 5.5 per cent expected earlier. For the next financial year, the government has pegged growth at 8.1-8.5 per cent.

Under the new methodology to calculate economic growth, the base year was changed from 2004-05 to 2011-12. The definition of GDP, too, was revised --- now, GDP growth is calculated at market prices, which include indirect taxes net of subsidies, against the earlier practice of calculating growth at factor cost, which excluded indirect taxes net of subsidies.