Lok Sabha Question No. 2847 (UNSTARRED), answered on 2015-12-16
Subject: GDP Calculation
Ministry: STATISTICS AND PROGRAMME IMPLEMENTATION
Asked by: PREM SINGH CHANDUMAJRA, HEMANT TUKARAM GODSE

## GOVERNMENT OF INDIA

## MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION

## LOK SABHA

## UNSTARRED QUESTION NO. 2847

## TO BE ANSWERED ON WEDNESDAY, THE 16 th  DECEMBER, 2015

## GDP CALCULATION

2847. SHRI S. RAJENDRAN:

SHRI PREM SINGH CHANDUMAJRA:

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

- (a) whether  the  economists  and  International  Monetary  Fund  (IMF) has termed the new methodology of Gross Domestic Product (GDP) calculation  and  recently  revised  GDP  growth  data  of  India  as 'puzzling' and prima facie one with 'discrepancies';
- (b)
- (c)
- if so, the details thereof and the reasons therefor;
- the reaction of the Government thereto;
- (d) whether the Government has any plan to report the old GDP with the new series for next few years for a smooth transition to the new series of national income statistics; and
- (e)
- if so, the details thereof and if not, the reasons therefor?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  FOR  MINISTRY  OF STATISTICS  AND  PROGRAMME  IMPLEMENTATION,  MINISTER  OF STATE  FOR  MINISTRY  OF  EXTERNAL  AFFAIRS  AND  MINISTER  OF STATE FOR MINISTRY OF OVERSEAS INDIAN AFFAIRS [GENERAL (Dr.) V.K. SINGH (Retd.)]

- (a) & (b) Most users of GDP data have appreciated compilation in the new  series being compliant  with the latest United Nation's guidelines in System of National Accounts, 2008. Some users are puzzled  by  the  difficulty  in  reconciling  the  new  series  estimates with  the  estimates  of  the  old  series  and  conventionally  used indicators. The new series represents a structural break from the old series, mainly due to two reasons:
- (i) Availability  of  new  source  of  information  for  the  corporate sector
- (ii) Better estimates for the unorganised sector due to incorporation  of  recent  estimates  from  the  2010-11  National Sample  Survey  on  unincorporated  enterprises  and  data  on sales and service taxes.
- (c) In order to clarify the doubts of the users, the Ministry released a publication  on  changes  in  methodology  and  datasets  in  the  new series of national accounts, which is available on the website of the Ministry. Necessary  clarifications  have  been  provided  in various fora. Frequently asked questions on new series alongwith replies  have  been  placed  in  the  public  domain.  A  Data  Users' Conference on new series of national accounts was also organized in the month of April 2015 to give the data users an opportunity to interact with the officers associated with compilation of national accounts.
- (d) & (e) No, Madam. The base year revision exercises are undertaken to  capture  the  changing  structure  of  economy.  This  ensures capturing  latest  information  and  hence  accurately  reflects  the current economic situation in the country. GDP based on old series would not reflect correct economic situation. Therefore, internationally accepted practice is to release GDP based on only the new series after the base year is revised.

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