Question : Economic Growth Rate

(a) whether the Union Government has recently lowered country’s economic growth rate during the previous UPA regime;

(b) if so, the details thereof and the justification for lowering the economic growth rate during the UPA regime along with the reasons for releasing the revised data now;

(c) whether the recalibration of GDP growth of the UPA regime has been deliberately twisted by the present Union Government;

(d) if so, the reasons therefor and the corrective steps the Union Government proposes to take to make available GDP data in accordance with the previous rules; and

(e) whether any changes have been made in GDP calculation method and if so, the details thereof ?

MINISTER OF STATISTICS AND PROGRAMME IMPLEMENTATION AND MINISTER OF CHEMICAL AND FERTILIZERS (SHRI D. V. SADANANDA GOWDA)

(a) to (e): A Statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (e) of Lok Sabha Starred Question No. *202 for 26th December, 2018 by SHRI GAURAV GOGOI and SHIRI JYOTIRADITYA M. SCINDIA regarding Economic Growth Rate:

(a) & (b): The Ministry of Statistics and Programme Implementation (MoSPI) is responsible for generating various macroeconomic indicators like GDP/GVA, IIP, CPI etc., in addition to the results emanating from the various nation-wide surveys undertaken by National Sample Survey Office (NSSO). MoSPI follows an established procedure of collaboration with various experts and stakeholders during the development of the indicators for its surveys. The methodology adopted is in alignment with the best international practices and guidelines adopted by UN and other international organisations like IMF etc. The base years of various indicators are revised from time to time to capture the structural changes in economy. Whenever base year is revised, MoSPI brings out linkage with the earlier series for consistency and comparability. The procedures adopted by MoSPI are based on latest data sources and methodology and are apolitical in nature. This is also in accordance with the United Nation Fundamental Principal of Official Statistics (UNFPOS), which India has adopted in 2016.

The MoSPI has recently released the Back Series estimates on GDP and its related macroeconomic aggregates for the years 2004-05 to 2010-11 on the latest Base Year 2011-12 which took place in 2015. The following table provides GDP and GDP growth Rates at 2011-12 and 2004-05 Base.

Years 2011-12 Base 2004-05 Base
GDP (at constant Prices) in Rs. Lakh Crore GDP Growth Rate
(in %) GDP (at constant Prices) in Rs. Lakh Crore GDP Growth Rate
(in %)
2004-05 54.80 32.42
2005-06 59.15 7.9 35.43 9.3
2006-07 63.91 8.1 38.71 9.3
2007-08 68.81 7.7 42.51 9.8
2008-09 70.93 3.1 44.16 3.9
2009-10 76.51 7.9 47.91 8.5
2010-11 83.01 8.5 52.82 10.3
2011-12 87.36 5.2 56.33 6.6

In 2011-12 base revision, there were major methodological changes as well as latest data sources and updated indices were used. The 2011-12 base has been majorly aligned with the United Nations (UN) recommendations of System of National Account (SNA)-2008 and this led to a different approach and methodology in treatment of institutional sectors and corresponding estimates. To back-cast these changes retrospectively was a complex exercise and required discussions with leading experts, especially since the new data sources were not available in the earlier series (Base 2004-05). This exercise, thus took a long time to complete.

(c) & (d): Question does not arise as the Back Series estimates are based on the sound methodology of 2011-12 base as per UN recommendations and available data source and have been released only after the approval of Advisory Committee on National Account Statistics (ACNAS).

(e): The major changes made in GDP calculation method for 2011-12 Base Series are estimation by institutional sectors, valuation of GVA at basic prices, Treatment of quasi corporations as corporations, Treatment of Central Bank as a non-market enterprise, computation of Financial Intermediation Services Indirectly Measured (FISIM) using Reference Rate method.
Some other changes inter-alia include use of Enterprise Approach , Modified Labour Input Method, use of Sales tax indicator for unincorporated trade instead of GTI index, instead of CPI (Industrial Worker & Agricultural Labours) which was only for a segment of population Sector specific CPIs (Health, Education, Transport & Communication) were used, inclusion of construction materials as basic materials (bitumen, glass) etc.
The 2011-12 Series has also incorporated improvements in terms of coverage such as inclusion of stock brokers, stock exchanges, asset management companies, additional mutual funds and pension funds, regulatory bodies like SEBI, PFRDA & IRDA and local bodies.
Further the 2011-12 Series used the latest surveys, data sources and rates-ratios, namely NSS 68th Round (2011-12) survey on Employment & Unemployment & Consumer Expenditure, NSS 67th Round (2010-11) Survey on Unincorporated Non-agricultural Enterprises (Excluding Construction), Use of MCA 21 database, New series of WPI & CPI in lieu of CPI-AL/IW etc.

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