Lok Sabha Question No. 202 (STARRED), answered on 2018-12-26
Subject: Economic Growth Rate
Ministry: STATISTICS AND PROGRAMME IMPLEMENTATION
Asked by: GAURAV GOGOI, JYOTIRADITYA MADHAVRAO SCINDIA

## GOVERNMENT OF INDIA

## MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

## LOK SABHA STARRED QUESTION NO.*202

TO BE ANSWERED ON WEDNESDAY, THE 26 TH DECEMBER, 2018

## ECONOMIC GROWTH RATE

*202. SHRI GAURAV GOGOI: SHRI JYOTIRADITYA M. SCINDIA:

Will  the  Minister  of  STATISTICS  AND  PROGRAMME  IMPLEMENTATION  be pleased to state:

- (a) whether the Union Government has recently lowered country's economic growth rate during the previous UPA regime;
- (b) if so, the details thereof and the justification for lowering the economic growth rate during the UPA regime along with the reasons for releasing the revised data now;
- (c) whether  the  recalibration  of  GDP  growth  of  the  UPA  regime  has  been deliberately twisted by the present Union Government;
- (d) if so, the reasons therefor and the corrective steps the Union Government proposes to take to make available GDP data in accordance with the previous rules; and
- (e) whether any changes have been made in GDP calculation method and if so, the details thereof ?

## ANSWER

MINISTER  OF  STATISTICS  AND  PROGRAMME  IMPLEMENTATION  AND MINISTER  OF CHEMICAL  AND  FERTILIZERS  (SHRI  D.  V.  SADANANDA GOWDA)

- (a) to (e):  A Statement is laid on the Table of the House.

Statement  referred  to  in  reply  to  parts  (a)  to  (e)  of  Lok  Sabha  Starred Question  No. *202 for 26 th   December, 2018 by  SHRI  GAURAV GOGOI and

SHIRI JYOTIRADITYA M. SCINDIA regarding Economic Growth Rate:

(a) &  (b): The  Ministry  of  Statistics  and  Programme  Implementation (MoSPI) is responsible for generating various macroeconomic indicators like GDP/GVA, IIP, CPI etc., in addition to the results emanating from the various nation-wide  surveys  undertaken  by  National  Sample  Survey  Office  (NSSO). MoSPI  follows  an  established  procedure  of  collaboration  with  various experts  and  stakeholders  during  the  development  of  the  indicators  for  its surveys. The methodology adopted is in alignment with the best international practices and guidelines adopted by UN and other international organisations like IMF etc. The base years of various indicators are revised from time to time to capture the structural changes in economy. Whenever base  year  is  revised,  MoSPI  brings  out  linkage  with  the  earlier  series  for consistency and comparability. The procedures adopted by MoSPI are based on latest data sources and methodology and are apolitical in nature. This is also in accordance with the United Nation Fundamental Principal of Official Statistics (UNFPOS), which India has adopted in 2016.

The MoSPI has recently released the Back Series estimates on GDP and its related macroeconomic aggregates for the years 2004-05 to 2010-11 on the latest  Base  Year  2011-12  which  took  place  in  2015.  The  following  table provides GDP and GDP growth Rates at 2011-12 and 2004-05 Base.

|         | 2011-12 Base                               | 2011-12 Base           | 2004-05 Base                               | 2004-05 Base           |
|---------|--------------------------------------------|------------------------|--------------------------------------------|------------------------|
| Years   | GDP (at constant Prices) in Rs. Lakh Crore | GDP Growth Rate (in %) | GDP (at constant Prices) in Rs. Lakh Crore | GDP Growth Rate (in %) |
| 2004-05 | 54.80                                      |                        | 32.42                                      |                        |
| 2005-06 | 59.15                                      | 7.9                    | 35.43                                      | 9.3                    |
| 2006-07 | 63.91                                      | 8.1                    | 38.71                                      | 9.3                    |
| 2007-08 | 68.81                                      | 7.7                    | 42.51                                      | 9.8                    |
| 2008-09 | 70.93                                      | 3.1                    | 44.16                                      | 3.9                    |
| 2009-10 | 76.51                                      | 7.9                    | 47.91                                      | 8.5                    |
| 2010-11 | 83.01                                      | 8.5                    | 52.82                                      | 10.3                   |
| 2011-12 | 87.36                                      | 5.2                    | 56.33                                      | 6.6                    |

In 2011-12 base revision, there were major methodological changes as well as  latest  data  sources  and  updated  indices  were  used.  The  2011-12  base has been majorly aligned with the United Nations (UN) recommendations of System of National Account (SNA)-2008 and this led to a different approach and  methodology  in  treatment  of  institutional  sectors  and  corresponding estimates.  To  back-cast  these  changes  retrospectively  was  a  complex exercise and required discussions with leading experts, especially since the new data sources were not available in  the  earlier  series  (Base  2004-05). This exercise, thus took a long time to complete.

(c) & (d): Question does not arise as the Back Series estimates are based on the  sound  methodology  of  2011-12  base  as  per  UN  recommendations  and available  data  source  and  have  been  released  only  after  the  approval  of Advisory Committee on National Account Statistics (ACNAS). (e):  The  major  changes made in GDP calculation method for 2011-12 Base Series  are  estimation  by  institutional  sectors,  valuation  of  GVA  at  basic prices,  Treatment  of  quasi  corporations  as  corporations,  Treatment  of Central Bank as a non-market enterprise, computation of Financial Intermediation  Services  Indirectly  Measured  (FISIM)  using  Reference  Rate method. Some other changes inter-alia include use of Enterprise Approach , Modified Labour  Input  Method,  use  of  Sales  tax  indicator  for  unincorporated  trade instead  of  GTI  index,  instead  of  CPI  (Industrial  Worker  &  Agricultural Labours) which was only for a segment of population Sector specific CPIs (Health,  Education,  Transport  &  Communication)  were  used,    inclusion  of construction materials as basic materials (bitumen, glass) etc. The  2011-12  Series has also incorporated improvements  in  terms  of coverage  such  as  inclusion  of  stock  brokers,  stock  exchanges,  asset management  companies, additional mutual funds and pension funds, regulatory bodies like SEBI, PFRDA & IRDA and local bodies. Further  the 2011-12 Series used the latest surveys, data sources and ratesratios,  namely    NSS  68th  Round  (2011-12)  survey  on  Employment  & Unemployment & Consumer Expenditure, NSS 67th Round (2010-11) Survey on  Unincorporated  Non-agricultural  Enterprises  (Excluding  Construction), Use of MCA 21 database, New series of WPI & CPI  in lieu of CPI-AL/IW etc.

*****