Finance Minister Arun Jaitley on Thursday, 29 November, came out in favour of the new formula to calculate GDP, devised by the Central Statistics Office (CSO). The new formula has scaled down the GDP figures for the first eight years of the previous UPA rule, thus attracting criticism from the Congress.
“In February 2015, the CSO worked on a new formula with 2011-12 as the base year and a new GDP series was announced,” Jaitley said adding that back then, it had revised the GDP figures of the last two years ( 2012-13 and 2013-14) of the UPA government and it was welcomed by the the people in the then government.
"Now that it has been revised downwards for the first 8 years, they are criticising it. We can't have two periods with two diff yardsticks,” Jaitley said adding that the data is realistic, it is not fictional.
In favour of the new formula, Jaitley further said, “This new series is globally more comparable, takes into account greater representation and is more reflective of the state of the economy.”
According to the new formula, barring only two financial years, 2012-13 and 2013-14, the back-series data released for years preceding 2011-12 scaled down growth rates from 2005-06 to 2013-14 by 0.8 to 2.1 percentage points.
Sharp downward revisions were seen particularly for two years, 2007-08 and 2010-11. For 2010-11, the growth rate was revised downwards from a double-digit rate of 10.3 per cent to 8.5 per cent, according to an Indian Express report.
“We had to recalibrate the entire economy based on the production output and the datasets available using the approach which is internationally accepted," the report quotes Pravin Srivastava, Chief Statistician of India, speaking in favour of the new formula.
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