CSO GDP recast: Media, politicians & famed intelligentsia turn blind eye, surprisingly!
Was Indian economy really struggling in the last three-four years or CSO’s latest GDP calculation criterion just flawed? Did the ruling dispensation, by design, recast the estimation method so that the economy could be projected in a better light, from earlier? Or, have Achhe Din finally arrived?
Coming straight to the point, it’s baffling to find how such a critical issue – Central Statistical Organization (CSO) recasting (Gross Domestic Product) GDP figures by introducing new base year as 2011-12 from earlier 2004-05 and using market cost in calculation in place of factor cost method to come up with GDP rate of 6.9 per cent for the fiscal year 2013-14 and 7.4 per cent for the fiscal year 2014-15 – went highly unnoticed, un-debated and unheard in the mainstream media, which is mostly busy carrying stories that lack essence or benefit society in any productive way.
Even the opposition, appears misnomer in the present milieu though, shied away from debating this key development for some anonymous reasons. Indisputably, there were columns in print from eminent economists such as Surjit Bhalla, but the vociferous tribe mostly failed the test.
Statistics: Not Aam Aadmi’s cup of tea
Had media, politicians and our famed intelligentsia focused on the issue, and should have; absolute political spectrum of the country would have witnessed a major revision? Nevertheless, the tragedy is that “Aam Aadmi” is oblivious to the significance that statistics holds in nation building.
The questions which should’ve been put across the incumbent political dispensation: If Indian economy was performing satisfactorily in the last two to three years, including Manmohan Singh led UPA II rule, calling the last government as inept and roadblock to growth of economy by the present Prime Minister Narendra Modi a mere political tool that lacked logic during his ruthless election campaign?
The revised GDP figures advocate such, at least. Rightly saying, this was the perfect time to counter the all-powerful BJP which rode to power on the plank of taking India back to days of high growth.
Alas, it was not to be!
Unfortunately, a big faction of TV news media eccentrically restrains from encouraging debates on these crucial issues as they don’t receive required response from an average viewer who lacks reasonable understanding of numbers and figures.
But, to find opposition Congress mute is really inexplicable.
Questions begging answers
It’s intricate to reconcile on what basis CSO’s revised estimates of GDP comes up with a 7.4 per cent projection for the fiscal year 2014-15.
Considering Index of Industrial Projection (IIP) numbers recording a 2.2 per cent year-on-year boost during April-November, excise revenue collections registering just 0.2 per cent growth in April-December, and general investment sentiment remaining relatively flaccid, on top of weak agricultural season; revised numbers are a bit tricky to digest. Gross fixed capital formation (GFCF) is only expected to touch 4.1 per cent growth this fiscal, which is low by regular standards.
However, CSO counters the allegations saying that GDP estimates are apparently based on ‘value-addition’ rather than ‘production’. Even if it’s a case, it should come from enhanced efficiencies. But that still cannot elucidate IIP-based manufacturing growth at a mere 2.1 per cent during April-December, against 6.8 per cent in the case of manufacturing value-added for the entire fiscal. Industrial growth slowed to 1.7 per cent in December from 3.9 per cent in November.
What CSO should explain is how efficiencies in the country’s manufacturing sector have dramatically gone up in both 2013-14 and 2014-15 to produce better than expected growth rates?