After former Chief Economic Advisor Dr Arvind Subramanian claimed in an article that the gross domestic product (GDP) growth rate was overestimated by 2.5 per cent between 2011-12 and 2016-17, Union Ministry of Statistics and Programme Implementation (MOSPI) on Tuesday said that India's GDP estimate is based on "global standardisation."
"Reports have appeared in a section of media citing Dr Arvind Subramanian as regards overestimation of India's GDP growth, primarily based on an analysis of indicators, like electricity consumption, two-wheeler sales, commercial vehicle sales, etc., using an econometric model and associated assumptions," said the ministry in a statement.
"The estimation of GDP in any economy is a complex exercise where several measures and metrics are evolved to better measure the performance of the economy. For the purpose of global standardization and comparability, countries follow the System of National Accounts evolved in the UN after elaborate consultation," said the ministry.
"The System of National Accounts 2008 (2008 SNA) is the latest version of the international statistical standard for the national accounts, adopted by the United Nations Statistical Commission (UNSC) in 2009 and is an update of the earlier 1993 SNA."
"The Inter-Secretariat Working Group on National Accounts (ISWGNA) was mandated to develop the 2008 SNA through intense discussions and consultation with member countries. India also participated in the deliberations of the Advisory Expert Group."
"In its adoption of the 2008 SNA the UNSC encouraged the Member States, regional and sub-regional organisations to implement its recommendations and use it for the national and international reporting of national accounts statistics based on the available data sources," said the ministry.
"With structural changes taking place in the economy, it is necessary to revise the base year of macroeconomic indicators like GDP, Index of Industrial Production (IIP), Consumer Price Index (CPI), etc, periodically to ensure that indicators remain relevant and reflect the structural changes more realistically," said the ministry.
"In India, the Base Year of the GDP Series was revised from 2004-05 to 2011-12 and released on 30 January, 2015 after adaptation of the sources and methods in line with the SNA 2008," said the ministry.
The ministry said that according to the World Bank, the accuracy of national accounts estimates and their comparability across countries depend on timely revisions to data on GDP and its components.
"The frequency of revisions to GDP data across countries varies between monthly, quarterly, annually or even less frequently. The International Monetary Fund (IMF), through its technical missions also reviews the implementation of recommendations of SNA and provides necessary technical support."
"It may also be seen that the GDP growth projections brought out by various national and international agencies are broadly in line with the estimates released by MOSPI. The GDP estimates released by the Ministry are based on accepted procedures, methodologies, and available data and objectively measure the contribution of various sectors in the economy," said the ministry in the statement.
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