10 Point Guide On The GDP Data Fight Between Government And Congress

In January 2015, the government moved to a new base year of 2011-12 from the earlier base year of 2004-05 for national accounts. Back-series estimates are compiled and released for the years before the new base year.

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10 Point Guide On The GDP Data Fight Between Government And Congress

Growth rates for all years between 2005-06 and 2011-12 have been downgraded

New Delhi:  The government's revised GDP data, which downgrades figures of growth during the previous Congress-led UPA's rule, has provoked a new political bust-up ahead of the 2019 national election. As the Congress accused Prime Minister Narendra Modi and Finance Minister Arun Jaitley of "malicious and fraudulent jugglery to mask the true state of economy", Mr Jaitley called the new data credible, comprehensive and a better reflection of the economy.
Following are the top 10 developments in this big story:
  1. Data released by the Central Statistics Office on Wednesday showed that the maximum growth rate in the UPA years was 8.5 per cent in 2010-11, significantly lower than the 10.3 per cent estimated earlier. The growth rates for all years between 2005-06 and 2011-12 have been downgraded.
  2. Responding to Congress outrage, Mr Jaitley said: "This new series is globally more comparable, it takes into account a far greater representation of the Indian economy, and is more reflective of the real state of the Indian economy."
  3. The Finance Minister reminded the Congress that it did not object when the back-series GDP data was introduced in 2015 and the revised growth figures turned out higher in the last two years of UPA rule. "Those who took after the new series in 2015 now consider the new series to be a 'hatched job (sic)' and a 'bad joke'," he said, referring to former finance minister P Chidambaram of the Congress.
  4. In a series of tweets, Mr Chidambaram called the revised numbers a bad joke. "NITI Aayog's revised GDP numbers are a joke. They are a bad joke," he said. "Actually they are worse than a bad joke. The numbers are the result of a hatchet job. Now that NITI Aayog has done the hatchet job, it is time to wind up the utterly worthless body," said the Congress leader.
  5. NITI Aayog Vice Chairman Rajiv Kumar said an extensive recalibration exercise using the latest data sources and methodological changes had led to a change in growth rates in the back series and the figures had been checked by leading statistical experts. "The government had no intention to mislead or do something purposefully which did not reflect the reality," he asserted.
  6. The opposition alleges that the government is bending facts and misreporting in order to look good despite the shocks of the 2016 demonetization as it seeks re-election next year.
  7. "A despotic Prime Minister and 'pseudo economist' Finance Minister have repeatedly caused economic mayhem by the ill-conceived decisions of demonetisation, a flawed GST coupled with tax terrorism. Faced with utter and complete rejection of the 'voodoo economics' of Modi and Jaitley duo, they are resorting to malicious and fraudulent jugglery of GDP figures to hide the enormous body blow caused by them to India's economy," said Congress spokesperson Randeep Surjewala.
  8. Several Congress leaders tweeted a report on former Chief Economic Adviser Arvind Subramanian saying that demonetisation was a massive, draconian, monetary shock that accelerated an economic slide.
  9. In January 2015, the government moved to a new base year of 2011-12 from the earlier base year of 2004-05 for national accounts. Back-series estimates are compiled and released for the years before the new base year.
  10. In August, a committee appointed by the National Statistical Commission had said in a report that the economy grew at a faster rate during the UPA rule compared to the first four years of the BJP-led government. In response, the government said it was only a draft, not the final word.




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Highlights

1
Congress accused the PM of fraud after Centre revised GDP data
2
New data showed GDP at 8.5% in 2010-11, down from 10.3% estimated earlier
3
Methodological changes led to change in growth rates, says NITI Aayog

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