RBI Governor Shaktikanta Das recently cautioned against “cherry-picking” of data, subtly arguing against the former Chief Economic Adviser”s paper, but neither was Arvind Subramanian”s paper the only one on GDP over-estimation nor his methodology.
A recent IIM Ahmedabad research paper titled “Overestimation in the growth rate of National income” by Sebastian Morris andTejshwi Kumari used similar methods to conclude that India over-estimated itsgrowth rate.
“Ever since the Central Statistical Organisation (CSO)changed the method of computation of national output (income), from what wascentred around final goods to a dominance of the use of estimates of valueadded across productive entities, the growth rate from the latter series didnot seem to reflect the reality, ” the research paper said.
While Subramanian”s research paper showed that India”s GDPgrowth had likely been overestimated by about 2.5 per cent points per year from2011-12 to 2016-17, Morris and Kumari”s paper said the growth was most likelyunder 6 per cent and closer to 5-5.5 per cent.
Subramanian”s paper caused a huge controversy and a fieryresponse from the Economic Advisory Council to the PM.
The council gave a “point to point” rebuttal to hispaper. Among the several points raised by the council was usage of selectiveindicators to derive a conclusion.
Besides, the council had said India has frequently revised its GDP calculation methodology and the latest one by Central Statistics Office (CSO) that changed the base year to 2011-12 along with other methodological changes, (as many countries do regularly) was no different. “Trying to find suitable proxies or approximation of GDP growth rate, when the official estimate is faulty is a legitimate exercise,” Professor R. Nagraj of Indira Gandhi Institute of Development Research (IGIDR), Mumbai told . IANS