‘New GDP series gives a more balanced view of economy’

The methodology of estimating GDP in the new series using 2011-12 as a base year does not necessarily give an optimistic view of the economy but presents a more balanced view, argued the Chief Statistician of India TCA Anant.

The new methodology brings in a more comprehensive and differentiated set of data. In fact the change in the base year led to lowering of GDP by 2 per cent, he said in an interaction organised by the Chennai International Centre.

Also, for example, following the revision in base year, the Gross Value Addition in retail trade was found to be lower than that computed in the old series with the base year as 2004-05. On the other hand the GVA in the corporate sector is better captured under the present methodology.

The value addition is estimated not just at the factory level but also from the full set of services that go into manufacturing as the data are from the statutory filing of accounts by the company. Nearly 45 per cent of the commercial activity which is outside corporate sector does not maintain regular accounts, the value addition in this segment is also now better estimated, he said.

Previously the Index of Industrial Production was used as a measure of output, based on data from the base year alone. But using the GVA may reflect a buoyant trend even in a tough year for the manufacturing sector as companies turn a profit on dropping raw material prices as happened in 2014-15.

The event moderated by Sunder Ramaswamy, Director, Madras School of Economics, is the fourth in a series organised by the CIC a neutral platform for thought leaders and opinion makers in diverse fields to share their views and to encourage debate.

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