Dr. Saurabh Garg, Secretary of the Ministry of Statistics and Programme Implementation, stated in an interview with NDTV that the reported GDP growth rate of 7.8 percent adheres to international calculation methodologies. He dismissed any doubts regarding the accuracy of this figure as unfounded.
The GDP figure has been questioned by economists including former Reserve Bank of India Governor Raghuram Rajan, former finance secretary Subhash Chandra Garg and some Congress leaders.
“I think we have been very transparent with what data sources we are using and those data sources are available for anyone to cross-check in case they have any doubts on that data,” he said in an exclusive interview with Gaurie Dwivedi. These same data sources, he said, are also corroborated by private sector company reports, by GST revenue collections which reflect payments actually made by firms and establishments on sales made, and production data, whether it is steel, cement, electricity or a host of others. The call to compare apples to apples had come from Union Commerce and Industry Minister Piyush Goyal, who said the critics were “misguiding people”.
“Even the larger economy is in doubt if the growth numbers aren’t real. There are some discrepancies which one has to worry about…. If we’re growing so fast, why aren’t we creating more jobs, more good jobs? And why is investment not taking place?” he had added.
Because the structure of the economy changes, he said, this base year is changed. “Ten years ago, in 2011-12, there were a large number of products which didn’t exist, whether it’s electronic goods or a host of other projects which have got phased out. So the industrial structure that was existing in 2011-12 has changed and that’s why the base year was changed to 22-23,” he said, underscoring that this is the international protocol and the United Nations and other international agencies have set methodologies for this. Subhash Chandra Garg, who was finance secretary from March to July 2019 and later took voluntary retirement, told NDTV: “The 7.8 per cent looks impressive on the face of it, but we should get into the reality of it… The current-prices GDP last year was Rs 86 trillion. This has been revised down to Rs 80 trillion… If you had not revised last year’s GDP, the growth in current prices would have been only 2.6 per cent.
Garg said GDP is calculated on the basis of both current prices — which reflects the pricing as of now, and constant prices, which reflects the actual economic value output growth, stripped of price rise. Also, every five to seven years, the base year for comparison is changed according to international practices. “Whenever we do these changes, we do it in consultation with these international agencies,” he added. The baseline, he said, was changed six months ago. “Are these growth numbers real?” former RBI governor Raghuram Rajan was quoted as saying by news agency Press Trust of India.
I don’t want to speculate on that number, but if at all someone wanted to use the previous base year, they would have had to recalculate it and use it. That’s comparing apples to apples,” he added. Because of improved methodologies that we had, that had been revised downward to 80 lakh crores six months back, not today, which I think which has also been incorrectly projected,” he added, in the previous base, it was 86 lakh crore, but as I mentioned,. So that’s how it moved from quarter one 24-25 from about 73 to 80 to 88.
“So the allegation that has been made is that in quarter one of this year, we have the figure of GDP at 88 lakh crores and which should be compared with the similar methodology and data that we had — which is 80 lakh crores, 80.3 lakh crores as of quarter one of the last fiscal year. “If we were to compare the number, had it been in the old base, what that number would have been, while it is speculation, it would have perhaps been at 93, 94, 95 lakh crore. It’s like in 24-25, as per the previous base year, the number was 79 lakh crore, but in the new base layer, it was somewhere around 72 or 73.
