Subramanian used "simplistic" model to assume Govt of India overestimated GDP

Counterview Desk
Even is refusing to reply point by point issues raised by Dr Arvind Subramanian, former chief economic adviser, Government of India (GoI), regarding how GoI has been ever since 2011 overestimating India’s GDP growth by a whopping 2.5%, the Ministry of Statistics and Programme Implementation (MOSPI) has asserted that the methodology followed by him based on indicators like electricity consumption, two-wheeler sales, commercial vehicle sales, etc. and using an econometric model to arrive at the conclusion is “simplistic.”
In a statement issued through the Press Information Bureau, the Ministry claims, its data is based on “global standardization” arrived by on the basis of consultations with UN’s statistical commission, and is broadly in line with the methodology followed by the International Monetary Fund and the World Bank. It adds, Ministry’s methodology has been reached following consensus reached by several government agencies and the Advisory Committee on National Accounts Statistics (ACNAS) comprising experts from academia.

Text of the statement:

Reports have appeared in a section of media citing Dr Arvind Subramanian as regards overestimation of India’s GDP growth, primarily based on an analysis of indicators, like electricity consumption, two-wheeler sales, commercial vehicle sales etc., using an econometric model and associated assumptions. The Ministry of Statistics and Programme Implementation has released details from time to time to explain the complexities involved in GDP compilation.
The estimation of GDP in any economy is a complex exercise where several measures and metrics are evolved to better measure the performance of the economy. For the purpose of global standardization and comparability, countries follow the System of National Accounts (SNA) evolved in the UN after elaborate consultation.
The System of National Accounts 2008 (2008 SNA) is the latest version of the international statistical standard for the national accounts, adopted by the United Nations Statistical Commission (UNSC) in 2009 and is an update of the earlier 1993 SNA. The Inter-Secretariat Working Group on National Accounts (ISWGNA) was mandated to develop the 2008 SNA through intense discussions and consultation with member countries.
India also participated in the deliberations of the Advisory Expert Group. In its adoption of the 2008 SNA the UNSC encouraged Member States, regional and sub-regional organizations to implement its recommendations and use it for the national and international reporting of national accounts statistics based on the available data sources.
As with any international standard, the data requirements are immense and diverse economies like India take time to evolve the relevant data sources before they can be fully aligned with the SNA requirements. In absence of data, alternate proxy sources or statistical surveys are used to estimate the contribution of various sectors to the GDP/GVA. The SNA also prescribes that the base year of the estimates may be revised at periodic intervals so that changes in the economic environment, advances in methodological research and the needs of users are appropriately captured.
With structural changes taking place in the economy, it is necessary to revise the base year of macroeconomic indicators like Gross Domestic Product (GDP), Index of Industrial Production (IIP), Consumer Price Index (CPI) etc., periodically to ensure that indicators remain relevant and reflect the structural changes more realistically. Such revisions not only use latest data from censuses and surveys, they also incorporate information from administrative data that have become more robust over time.
In India, the Base Year of the GDP Series was revised from 2004-05 to 2011-12 and released on January 30, 2015 after adaptation of the sources and methods in line with the SNA 2008. The methodology of compilation of macro aggregates has been discussed in detail by the Advisory Committee on National Accounts Statistics (ACNAS) comprising experts from academia, National Statistical Commission, Indian Statistical Institute (ISI), Reserve Bank of India (RBI), Ministries of Finance, Corporate Affairs, Agriculture, NITI Aayog and selected State Governments.

It may be noted that decisions taken by these Committees are unanimous and collective after taking into consideration the data availability and methodological aspects before recommending the most appropriate approach.
In addition, India has subscribed to the Special Data Dissemination Standard (SDDS) of the International Monetary Fund (IMF) and an Advance Release Calendar is decided for release of estimates. The IMF had raised certain issues on the usage of double deflation in the Indian GDP series and India had informed IMF that the existing data availability does not permit its application in India at present.
In fact, some media reports, while citing the changes in GDP growth likely to result from adopting the double deflation, acknowledge the varying outcomes obtained by different authors under their own distinct assumptions. In view of these divergent views, the Advisory Committee on National Accounts Statistics (ACNAS) had not agreed to adoption of double deflation at this stage. Moreover, double deflation is used in only a few countries that have a Producers Price Index (PPI) to deflate the inputs.
According to the World Bank, the accuracy of national accounts estimates and their comparability across countries depend on timely revisions to data on GDP and its components. The frequency of revisions to GDP data across countries varies between monthly, quarterly, annually or even less frequently. The International Monetary Fund (IMF), through its technical missions also reviews the implementation of recommendations of SNA and provides necessary technical support.
Further, under Article IV of IMF, a Mission, interacts annually with officials of Ministry of Statistics and Program Implementation, Reserve Bank of India and Ministry of Finance on issues relating to economic development and policies. The detailed methodology for compilation of the GDP, including the Back Series is available on the website of the Ministry. It may also be noted that the National Accounts Division, which compiles these macro aggregates and other National Accounts Statistics is also ISO (International Organisation for Standards) 9001:2015 certified for its quality management of procedures and processes.
With any Base Revision, as new and more regular data sources become available, it is important to note that a comparison of the old and new series are not amenable to simplistic macro-econometric modelling. It may also be seen that the GDP growth projections brought out by various national and international agencies are broadly in line with the estimates released by MOSPI. The GDP estimates released by the Ministry are based on accepted procedures, methodologies and available data and objectively measure the contribution of various sectors in the economy.

Comments

US-China truce temporary, larger trade war between two economies to continue

By Prabir Purkayastha The Trump-Xi meeting in Busan, South Korea on 30 October 2025 may have brought about a temporary relief in the US-China trade war. But unless we see the fine print of the agreement, it is difficult to assess whether this is a temporary truce or the beginning of a real rapprochement between the two nations. The jury is still out on that one and we will wait for a better understanding of what has really been achieved in Busan.

When growth shrinks people: Capitalism and the biological decline of the U.S. population

By Bhabani Shankar Nayak* Critically acclaimed Hungarian-American economic historian and distinguished scholar of economic anthropometric history, Prof. John Komlos (Professor Emeritus, University of Munich), who pioneered the study of the history of human height and weight, has published an article titled “The Decline in the Physical Stature of the U.S. Population Parallels the Diminution in the Rate of Increase in Life Expectancy” on October 31, 2025, in the forthcoming issue of Social Science & Medicine (SSM) – Population Health, Volume 32, December 2025. The findings of the article present a damning critique of the barbaric nature of capitalism and its detrimental impact on human health, highlighting that the average height of Americans began to decline during the era of free-market capitalism. The study draws on an analysis of 17 surveys from the National Health and Nutrition Examination Survey (NHANES), conducted by the U.S. Centers for Disease Control and Prevention (...

Is vaccine the Voldemort of modern medicine to be left undiscussed, unscrutinised?

By Deepika* Sridhar Vembu of Zoho stirred up an internet storm by tweeting about the possible link of autism to the growing number of vaccines given to children in India . He had only asked the parents to analyse the connection but doctors, so called public health experts vehemently started opposing Vembu's claims, labeling them "dangerous misinformation" that could erode “vaccine trust”!

Justice for Zubeen Garg: Fans persist as investigations continue in India and Singapore

By Nava Thakuria* Even a month after the death of Assam’s cultural icon Zubeen Garg in Singapore under mysterious circumstances, thousands of his fans and admirers across eastern India continue their campaign for “ JusticeForZubeenGarg .” A large digital campaign has gained momentum, with over two million social media users from around the world demanding legal action against those allegedly responsible. Although the Assam government has set up a Special Investigation Team (SIT), which has arrested seven people, and a judicial commission headed by Justice Soumitra Saikia of the Gauhati High Court to oversee the probe, public pressure for justice remains strong.

Govt claims about 'revolutionary' rice varieties raise eyebrows: SC order reserved since Jan '24

By Rosamma Thomas * In a matter of grave importance for agriculture, public health awaits Supreme Court ruling, even as top Government of India bureaucrats stand accused of “willful and deliberate disobedience” of the top court. While a contempt petition filed by Aruna Rodrigues , lead petitioner in the Genetic Modification (GM) of crops matter remains pending in the Supreme Court since July 2025, the Union ministry of agriculture asserts that two home-grown gene edited rice varieties are of superior quality, and hold potential for “revolutionary changes in higher production, climate adaptability, and water conservation.” In May 2025, the Press Information Bureau released a press release stating that a “historic milestone” had been reached, under the leadership of Prime Minister Narendra Modi ; the new varieties, DRR Rice 100 (Kamla) and Pusa DST Rice 1 , the press release stated, offer both benefits – increased production and environmental conservation.

Gujarat civil society to move Supreme Court against controversial electoral roll revision

By Rajiv Shah A recent, well-attended meeting of Gujarat civil society activists in Ahmedabad , held to discuss the impact of the ongoing Special Intensive Revision (SIR) of electoral rolls, has decided to file a petition in the Supreme Court against the controversial exercise initiated by the Election Commission of India (ECI) across the country. Announcing this, senior High Court advocate Anand Yagnik , who heads the Gujarat chapter of the People’s Union for Civil Liberties (PUCL), said that a committee has already been formed to examine the pros and cons of SIR. “While the SIR exercise began in Gujarat on November 4 and is scheduled to continue for a month, we will file a supporting petition in the case against SIR in the Gujarat High Court or the Supreme Court after observing how it proceeds in the state,” he said. Yagnik’s announcement followed senior advocate Shahrukh Alam —who is arguing the SIR case in the Supreme Court—urging Gujarat’s civil society to also file ...

Banks, investors pour $52 billion into metallurgical coal expansion despite global climate pledges

By A Representative A new report by the German environmental and human rights NGO Urgewald has revealed that banks and institutional investors have poured nearly $52 billion into the expansion of metallurgical coal, or “met coal,” despite global commitments to phase out coal financing. Between 2022 and 2024, banks provided $21.96 billion in loans and underwriting to met coal developers, while investors held $30.23 billion in securities of companies expanding coal mining operations. The report, Still Burning: How Banks and Investors Fuel Met Coal Expansion, warns that loopholes in coal exit policies have allowed continued support for coal used in steelmaking — a sector responsible for about 11% of global CO₂ emissions.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Rajiv Shah 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".

Trump escalates threats of war against Venezuela, as millions in US set to lose essential benefits

By Manolo De Los Santos The United States government is in the grips of one of its longest-running funding gaps in history. The ongoing government shutdown has already stretched beyond 30 days and now, the food security of millions of Americans is at risk as the funding to the Supplemental Nutrition Assistance Program (SNAP) is drying up and Trump officials have refused to tap into contingency funds . Approximately 42 million individuals per month rely on SNAP benefits and are set to lose them beginning on November 1.

Search This Blog