Clearing the air over the new Gross Domestic Product (GDP) numbers, National Statistical Commission (NSC) chairman Pronab Sen today said that Central Statistics Office (CSO) is following the correct methodology for computing national accounts and is on the right track.
"They have implemented the procedure and methodology approved by the Commission and followed its instruction for calculating the GDP numbers," Sen told PTI.
The CSO had adopted the new series of National Accounts with 2011-12 as base year and subsequently revised the Gross Domestic Product (GDP) growth rate to 6.9 per cent in 2013-14 from 4.7 per cent and 5.1 per cent in 2012-13 from 4.5 per cent.
CSO has estimated economic growth at 7.3 per cent for 2014-15, slightly lower than its earlier advance estimate of 7.4 per cent.
The Commission is examining the new growth numbers arrived at by the CSO and is in the process of finalising a report on new GDP numbers and methodology used to calculate it.
"However, we have not looked into the implication of the new GDP numbers so far. We would soon look at this aspect also and after that we will finalise our report on GDP numbers," Sen said.
Earlier, NITI Aayog Vice-Chairman Arvind Panagariya had also echoed similar views and said,"scientifically speaking, we can't reject a change that is methodologically sound just because the outcome it produces fails to agree with our intuition. In such circumstances, we must critically examine our own intuition."
Several domestic and global experts including RBI Governor Raghuram Rajan and Chief Economic Advisor Arvind Subramanian had raised doubts about the accuracy of the new series. Even the Parliamentary Standing Committee on Finance was not convinced about the new growth projections.
"I am puzzled as I said because the fact that..., especially what happened in 2013-14, that number is puzzling because that is a kind of bad year, yet growth accelerated," Subramanian had said in February.
"We do need to spend more time to understand the GDP numbers," Rajan had said in February 3 bi-monthly monetary policy meet of the central bank that retained the forecast of 5.5 per cent GDP (based on old method) growth in 2014-15.