Skip to main content

India's GDP growth 5.2% in 2015-16 against 7.1% in 2014-15, thanks to discripancies: Top consultants CMIE

By Our Representative
Sharply disputing the Government of India's estimate that India's gross national product (GDP) grew at 7.6 per cent in the financial year 2015-16, India's top statistical consultancy firm Centre for Monitoring Indian Economy (CMIE) has said that, according to its calculation, it should be 5.2 per cent, down from 7.1 per cent a year earlier.
CMIE says, “Of the 7.6 per cent growth in GDP for the year, 2.4 per cent came form discrepancies. The discrepancies amounted to Rs 2.2 trillion. Excluding discrepancies, India’s GDP would have grown by 5.2 per cent in 2015-16, as against a 7.1 per cent growth in 2014-15, which also excludes discrepancies.”
“That means the entire improvement or acceleration in growth rests upon the discrepancies figures”, it underlines.
According to experts, “discrepancies” make up the difference between estimation of GDP through the production side and expenditure side. They further explain it as the difference between aggregate of private consumption expenditure, government expenditure, investment and net export, and GDP estimated from production approach.
The larger the “discrepancies,” the more worried one is likely to get about the veracity of production side GDP, they believe.
Coming to the claim that in the last quarter of 2015-16 (January-March 2016), when the Indian economy “almost touched the 8 per cent magic growth figure”, as claimed by Niti Aayog's Arvind Panagariya, an economist from Columbia University hired by Prime Minister Narendra Modi, the CMIE says, things are “no different”.
CMIE underlines, “Of the 7.9 per cent growth in GDP during the quarter, 4.1 per cent came from discrepancies. Excluding discrepancies, the 3.9 per cent growth in GDP would have been the lowest in last 13 quarters.”
CMIE is not only expert body which has disputed Government of India data. The prestigious British daily, “Financial Times” (FT) through a blog “Discrepancies and Indian GDP data” by David Keohane has said that the claim of the country’s status as the world’s “fastest expanding large economy” and the “most dynamic emerging market” is a “qualified, confusing good news.”
It quotes Goldman noting as noting that the “data from the expenditure side shows that the improvement in GDP growth in Q1 (of 2016) was largely driven by higher private consumption and relatively lower drag from net exports.”
Further: “Fixed investment declined for the first time since March 2014... A significant fraction of headline GDP growth is unexplained as ‘discrepancies ‘ amount to 4ppt of GDP vs 2.1ppt in the previous quarter (the discrepancy is the difference with the industry GDP data, which are used as the control). ”
The FT bog also quotes SocGen as saying, “At 7.9% yoy, it was the strongest growth rate recorded in the past six quarters. Domestic demand, which has been holding up fairly well this year, emerged as the largest contributor to growth (8.3% yoy).”
However, SocGen underlines, “Unfortunately, discrepancy was the other major growth driver, raising questions about the continued poor quality of data. Discrepancy was as high as 4.8% of GDP, the highest ever in the history of the new data series, and accounted for virtually 50% of the increase in real GDP. ”
It also quotes CapEcon’s Shilan Shah as saying that India's GDP figures “are hard to align with other evidence on the economy’s health. For instance, today’s data show manufacturing expanding 9.3% y/y last quarter. By contrast, the monthly data on industrial production show output rising just 0.2% y/y in Q1, from growth of 1.8% y/y in Q4.”
Shah further says, “Admittedly, there is reason to believe that economic growth has picked up recently. For example, auto sales and cargo volumes have accelerated. But the short point is that – as we have cautioned since the release of the revised GDP series last year – we should take the official GDP data, and the world-beating rates of growth they are suggesting, with a pinch of salt. ”

Comments

TRENDING

Communal rhetoric? Hindutva preached by RSS-BJP is 'monolithic', not Hinduism

By Prem Verma*  I am a devout Hindu but not a believer of RSS Hindutva form of Hinduism which brings about hatred of other religions. My Hindu religion has not taught me to look down on other religions and neither has it instilled in me to go about converting others to my religion because my religion is superior.

Gross 'injustice' to children: Rs 5000 cr cut in education budget; 15 lakh schools shut down

Counterview Desk  More than 100 dignitaries, including educationists, academia, social activists, teachers’ union, civil society organisations (CSOs), various networks and people working on child rights, in a letter to Union Finance Minister Nirmala Sitharaman have sought reversal of reduction in allocation for education in the Union Budget 2021-22, even as demanding substantial increase in it.

India sees 62 journo deaths, 4th highest, amidst pandemic: Swiss media rights body

By Our Representative The Switzerland-based media rights body Press Emblem Campaign (PEC) has noted that India is the fourth most affected country as far as mediapersons’ death on account of Covid-19 is concerned. According to Blaise Lempen, secretary-general of PEC, the global tally of casualties among media persons in the Covid-19 pandemic has reached 1,036 journalists in 73 countries till date.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

RSS love for 'killer' Myanmar junta behind Indian military presence at Tatmadaw Day?

By Shamsul Islam*  If a shameful act means an action which is criminal and nauseating, it would be an understatement to describe the attitude of the present RSS-BJP rulers of India towards the demolition of democracy and large-scale killing of the people of Myanmar by the military ( tatmadaw ) junta which took power through a coup on February 1, 2021 after renegading the election results in which the party of Aung San Suu Kyi, National League for Democracy, was a clear winner.

Chhattisgarh’s Apra riverfront imitates Sabarmati: 'Devaluing' water, environment

Sabarmati riverfront By Mansee Bal Bhargava*  This year’s #WorldWaterDay (March 22) focus was on ‘Valuing Water’. My school friend, Pragati Tiwari from Bilaspur, Chhattisgarh, called that day knowing my interest in water matters. We were remembering our childhood days as how we used to play on the banks and the bed of the Arpa Nadi (River) during the summer holidays and as how the river would swell like Anaconda to flow happily during the monsoon.

Bihar massacre on Holi day: Brahminical, casteist mindset behind 'uneasy' silence

Bihar chief minister Nitish Kumar By Vidya Bhushan Rawat*  Several people were killed in Bihar amidst Holi festivities, but not much response has come in from the media. The silence of the government and the society as a whole is also appalling. We seek to romanticise these festivals, yet we forget that every year they take so many lives. This despite the fact that Holi appears to be the best time for 'avenging things'.

India's draft migrants policy: Whither concern on job restrictions imposed by states?

By Anil Kumar*  India’s Niti Aayog has prepared a Draft Migration Policy. The draft policy acknowledges migration as an integral part of development, and it calls for positive government interventions that facilitate internal migration. With a rights-based solution to migration, the draft states that the policy should “enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive”.

Recalling Jallianwala martyrs' communal amity as BJP 'warns' of Sitalkuchi everywhere

By Shamsul Islam*  The RSS-BJP rulers declare India to be a battle-ground between Hinduism and Islam. Muslims have been declared as ‘internal threat’ by RSS ideologue MS Golwalkar (“Bunch of Thought”, Chapter xvi). Behaviour of many of their leading cadres, including those who hold high constitutional posts, is such that they seem to be conspiring over-time to ignite a civil war between the two communities. They are under the impression that this would help divert attention from failures of the Hindutva rulers on developmental front.