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Govt changes base year to claim there was no double-digit growth during UPA era; Congress alleges 'manipulation' of data

Recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the CSO estimated that India's GDP grew by 8.5% in the financial year 2010-11 and not at 10.3% as previously estimated.

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Prime Minister Narendra Modi and ex-PM Manmohan Singh
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The government on Wednesday lowered the country's economic growth rate during the previous Congress-led UPA regime, shaving off over 1 percentage point from the only year when India posted double-digit GDP growth post liberalisation and from each of the three years with 9-plus% expansion.

Govt changes base year to 2011-12, says growth in 2010-11 was 8.5%

Recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the Central Statistics Office (CSO) estimated that India's GDP grew by 8.5% in the financial year 2010-11 (April 2010 to March 2011) and not at 10.3% as previously estimated.

Similarly, 9.3% growth rate each in 2005-06 and 2006-07 was lowered to 7.9% and 8.1% respectively, while 7.7% rate was now estimated for 2007-08 instead of 9.8%.

The GDP growth rate for 2008-09 -- the year that witnessed the global financial crisis -- was lowered to 3.1% from 3.9% in the previous estimate. For the following fiscal, the same was revised to 7.9% from 8.5% and for 2011-12, the growth was lowered to 5.2% from 6.6%.

In January 2015, the government moved to a new base year of 2011-12 from the earlier 2004-05 for national accounts. The base year of national accounts had been revised earlier in January 2010.

The revised growth numbers have been released ahead of the 2019 general elections.

At a joint press conference along with Chief Statistician Pravin Srivastava, Niti Aayog Vice-Chairman Rajiv Kumar said variation in two sets of numbers was due to the recalibration of data in certain sectors of the economy, including mining, quarrying and telecom.

"A complex exercise has been carried out by the Ministry of Statistics and Programme Implementation to update the National Accounts Series. The new series has made significant methodological improvements," Kumar said.

He added that the New Series, with its supporting back series, is "internationally comparable and is in sync with UN Standard National Account." 

When asked if it is a coincidence that GDP numbers have been revised downwards only for the UPA period, Kumar replied in the negative.

"No it was not a coincidence. It was a matter of hard work done by the CSO officials who had taken the pain to do all the recalibration of economy that they have done," he said, adding, the methodology adopted has been vetted by leading statisticians.

'No intention to mislead'

Kumar further said the government has no intention to "mislead or try and do something purposefully" which does not reflect the reality.

Back-series data in contrast with NSC report 

The so-called back-series data released Wednesday is in contrast to an August 2018 report by the Committee on Real Sector Statistics appointed by the National Statistical Commission (NSC), the autonomous body that helps in collection of data by India's statistical agencies.

In the report, which the government had subsequently stated was a draft seeking comments from stakeholders, the economy grew at a faster pace under the UPA government from 2004-05 to 2013-14, compared with the average growth during the first four years of the current government.

It had put the GDP growth at 10.08% in 2006-07 under the then Prime Minister Manmohan Singh, the highest since the liberalisation of the economy in 1991. The highest ever growth rate since Independence was stated to be at 10.2% in 1988-89 when Rajiv Gandhi was the Prime Minister.

The committee's report has not been accepted and Kumar said the methodology adopted by them was flawed.

Giving reasons for divergence in the data sets, Srivastava said in the new series the share of primary sector in total Gross Value Added (GVA) is higher than that in the earlier 2004-05 series primarily due to changes in the data sources.

In the mining and quarrying sector, regular annual returns of public sector have been used instead of the Indian Bureau of Mines data in the 2004-05 base.

As per the CSO, the share of secondary sector in total GVA has increased in the back-series compared to the 2004-05 series. The increase is largely due to use of Ministry of Corporate Affairs (MCA) data and public sector data in organised electricity and manufacturing sectors, which was earlier sourced from annual reports of private electricity companies and annual survey of industries, respectively.

The share of the tertiary sector, which mainly includes services, in overall GVA has reduced in the back-series compared to the 2004-05 series.

Giving an example, Kumar said in the communication sector, in the old series, benchmark estimates were moved with telecom subscriber growth, where the growth was over 20%.

In the new series, minutes of usage has been adopted, which better reflects the behaviour of this sector, said the Niti Aayog Vice-Chairman.

The GDP figures for fiscals 2012-13 onwards on old series are not available for comparison, Kumar said, adding that the methodology used for computing the national accounts is in line with global standards. 

Congress alleges 'manipulation' of data

The Congress Wednesday accused the Modi government of "manipulating" GDP data of previous years and said it reflects an desperate attempt to undermine India's growth story over the last 15 years.

Congress chief spokesperson Randeep Surjewala termed the step a "classic" case where "the operation is successful but the patient is dead".

"The entire GDP back series data released today reflects the desperate attempt of a defeatist Modi Government to undermine India's growth story over last 15 years. Modi Government and its puppet Niti Aayog want the people to believe that 2+2=8.

"Such is the gimmickry, jugglery, trickery and chicanery being sold as 'back series data'," he said in a statement. 

There was no immediate reaction from the BJP on the Congress's claims and allegations.

The Congress leader said the economic mismanagement under the Modi government has led to economic anarchy and jugglery of GDP figures. "Manipulated back series data' will not change Modi government's exit date'. (Prime Minister Narendra) Modiji's new definition of GDP is 'Gimmickry Data Product'," he said.

Surjewala alleged a failed "Modinomics plus a Pakoda economic vision" has put India's economy in complete turmoil, and the prime minister and his finance minister have 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 the Modi-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," he said. 

Surjewala alleged that since the advent of the NDA government in May 2014, there has been a determined effort to run down the record of the two UPA governments under Manmohan Singh during 2004-2009 and 2009-2014. 

A lot of confusion was sown and the Modi government added to the confusion by changing the base year from 2004-05 to 2011-12, he said.
 
The Congress leader said his party has repeatedly pointed out that when the base year was changed, the government should follow the healthy international practice and revise the numbers for the previous years. 

"We had demanded that the back series data of GVA and GDP should be calculated and released so that meaningful comparisons can be made," he said, adding that the back series data as released by National Statistical Commission (NSC) in August 2018 is available in public domain and numbers prove that the truth cannot be suppressed. 

'UPA delivered the highest decadal growth of 8.13%'

The opposition leader claimed that UPA-1 and UPA-2 delivered the highest decadal growth of 8.13% at factor cost since Independence and during this period 140 million people were lifted out of poverty. 

When the UPA demitted office, economic growth had recovered to 6.39% at market prices in 2013-14. Besides, the fiscal deficit had been reduced to 4.48% and the current account deficit contained at 1.7%, he claimed.

"The revised New Series' computed today by the Ministry of Statistics and Niti Aayog has completely undermined the NSC (National Statistical Commission), the autonomous body for deciding data transparently and in accordance with global standards of calculating GDP as per Market Price Linked Methodology. 

"Today, the Modi government deceived the country by surreptitiously changing the methodology in order to manipulate GDP data. This is called Excel Sheet Management' i.e deciding the result first and filling the marks later. The new methodology is GVA based, which does not take into account tax+ subsidies and consequently is extremely flawed to sub serve the myopic interests of the Modi government," he said. 

Surjewala alleged that under this government, there has been complete stagnation in investment and the Gross Fixed Capital Formation in the last three years has remained constant at 28.5%. "At that level of investment (GFCF), it is not possible to achieve higher growth rates," he said.

(With PTI inputs) 

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