India gets IMF help on 'back-casting' of new GDP data

India has got help from the International Monetary Fund (IMF) on 'back-casting' of the new GDP series to provide comparable figures for earlier years in the wake of changes in the GDP computation methodology.
Along with the changes made in January to the methodology and the base year, the government had also revised its GDP growth estimates for 2014-15 and the current fiscal.
With regard to the previous years, the revised data is however only available for the past three fiscals, thus creating confusion about the comparable figures for the earlier years.
"In response to a longstanding request from the CSO and Ministry of Finance, a team from the IMF's Statistics Department visited New Delhi during April 22 to May 5," an IMF spokesperson Gerry Rice said.

The team reviewed the methodology of the new GDP estimates and provided guidance on back-casting the series so that a longer revised series is made available to users.
The Central Statistical Office (CSO) of India released revised estimates of GDP in January 2015. The estimates are compiled according to the guidelines of the 2008 System of National Accounts and the base year was updated to 2011-12 from 2004-05.

Moreover, the GDP estimates incorporate new source data and modified compilation techniques.
"The team's visit was part of the IMF's regular programme of providing technical assistance to member countries for capacity building. Reports about the team auditing India's newly adopted GDP methodology were incorrect," Rice said.

In a report on India published in March, IMF had said the country has improved the way it measures economic output and raised its growth forecast for India to 7.5 per cent for 2015-16, after taking into account the revised figures.
IMF had said at the time that it would "continue to examine the improved GDP methodology and its implications for its growth forecasts, and further details on the compilation methodology will enable a deeper understanding of India's near-term and medium-term growth".
Ever since the government announced the new methodology in January and revised upward its growth estimates, there have been concerns in some quarters about the same.

The revised data have been termed as "puzzling" by a number of experts and policymakers alike while the Reserve Bank of India (RBI) had also sought clarity from the government on the new methodology and the revised figures.
Chief Economic Advisor Arvind Subramanian, who had also served previously at IMF, last month termed the revised GDP growth figures have "puzzled" him and said the numbers have been "bumped up" and it was a mystery how to interpret them.
The upward revision to GDP figures has also been questioned by RBI Governor Raghuram Rajan, and most recently by a Parliamentary panel.