Almost 50% Uprise in Economic Growth

New Delhi: India’s economy grew almost 50 per cent faster in 2013/14 than earlier thought, the government said on Friday after changing a formula, a reminder of the challenges that unreliable statistics present to Indian policymakers.

In the year leading up to the elections that brought Prime Minister Narendra Modi to power last May, the economy grew 6.9 per cent, not the 4.7 per cent reported earlier, chief statistician T.C.A. Anant told reporters.

The revised formula, showing a faster recovery, includes under-represented and informal sectors as well as items such as smartphones and LED television sets in gross domestic product.

That could boost India’s growth figure in the year ending in March 2015, which the Reserve Bank of India (RBI) has projected to be around 5.5 per cent.

“This will help lower market distortions and give better representation to the manufacturing sector,” said Soumya Kanti Ghosh, chief economic adviser at State Bank of India.

Among the worst offenders are the volatile index for industrial production and the jobless numbers, seen as very unrepresentative. The latest GDP revision is part of a change to the method of calculating national accounts that happens every five years.

“It is a problem for the government and economists who are trying to understand the exact situation,” said D.H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi. “It is even a problem for the RBI, that doesn’t have a full view about how the economy is performing.”

Source:Ndtvprofit

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