How reliable are India`s GDP and other figures?

DEBATE

The advance estimate of GDP growth for 2000-01 was 6%, this was revised to 5.2% in 2001, was reduced to 4% in 2002 and then raised again to 4.4% in 2003!

GDP estimates for any year are derived on the basis of a range of parameters, trends, predictions and, yes, guesswork. As better quality data becomes available, these are updated. There have been many cases of updations and revisions. Take for instance the year 2000-2001. The advance estimate of the growth rate was 6 per cent revised down to 5.2 per cent in 2001, which was changed in 2002 to 4 per cent and again changed in 2003 to 4.4 per cent. That year was a bit worse than usual, but generally there are three or four changes between the advanced estimate to the final one. And this process takes about three years before the numbers finally stabilise. Moreover, quarterly GDP estimates tend to see far wider fluctuations in the estimates. Further, various estimates of agriculture GDP tend to fluctuate more. The estimate for the 2006-07 agri-GDP growth figures was updated from 3.9 to 6 per cent around the end of January 2007; a rare, but by no means unique, occurrence. But agriculture is not the only culprit. The Index of Industrial Production Manufacturing for Dec