New Delhi: The Finance Ministry on Friday defended an upward revision in the growth estimates for the first two quarters in the current financial year.
In the second advance estimate of national income released on Friday, the National Statistical Office (NSO) upwardly revised the GDP growth estimate for the first quarter (April-June) to 5.6% from the earlier estimate of 5.1%, and for the the second quarter, it was revised to 5.1% from 4.5%.
The revised GDP growth numbers put out by the NSO once again raised the question of credibility of official data. However, the government defended the revised numbers saying that all the official numbers have been properly benchmarked.
“No government gives out a wrong statistics,” said a senior finance ministry official.
Prime Minister Narendra Modi’s government has come under sharp criticism from the opposition parties over unprecedented slowdown witnessed at the start of his second term.
As per the data released earlier, the GDP growth rate in the second quarter was estimated to be 4.5%, the lowest since the January-March period of FY 2012-13.
“You all know that there has been a readjustment on the basis of the revision in the last year’s GDP growth numbers,” said the senior bureaucrat.
This is not for the first time when Prime Minister Modi’s government has come under criticism for the quality of GDP growth data.
Controversy over GDP data
In fact, in a report published last year, former chief economic adviser Arvind Subramanian, had argued that the country’s GDP growth data had probably been inflated by up to 2.5%. Several other economists also urged the government to restore the credibility of official data.
In recent years, opposition parties have often criticised the government over the quality of official data, blaming it for concealing the correct situation of the economic slowdown from the public.
Another senior official in the Finance Ministry attributed the upward revision of GDP numbers this year to the low base effect as the GDP growth for the last fiscal was sharply revised downwards.
“The previous year’s growth was revised downwards,” he said.
In January this year, the NSO, under the ministry of statistics and programme implementation (MoSPI) downwardly revised the GDP growth figure for FY 2018-19 to 6.1%, from an earlier estimate of 6.8%. A sharp reduction of 70 basis points.
"The base effect may have contributed to the upward revision of the growth in the first two quarters of this year," he told ETV Bharat.
What goes into advance estimate of national income
The government said the sector-wise estimates have been obtained by extrapolation of indicators like the IIP (the Index of Industrial Production) for the first 9 months of this fiscal, among other crucial information.
It said the revised numbers also include the financial performance of listed private companies till December 2019, second advance estimate of crop production, and accounts of central and state governments, among other things.
The NSO also included other indicators like deposits & credits, passenger and freight earnings of railways, passengers and cargo handled by civil aviation sector and also the cargo handled by major seaports, sale of commercial vehicles for the first 9-10 month of this fiscal to calculate the second advance estimate of national income.
(Article by Senior Journalist Krishnanand Tripathi)
