MoSPI Secretary Saurabh Garg on Thursday defended the government’s latest GDP estimates, saying the controversy over the revision of last year’s first-quarter figures was surprising as the numbers had been in the public domain for several months.
Garg said the Q1 GDP figure for the previous financial year under the old 2011-12 base had been released in February, while the figure under the new 2022-23 base had also been available for around six months.
“The only new figure that has now been put out in the public domain is the Rs 88 lakh crore for Q1 of this year. So I am surprised after seeing Q1 figure of this year, questions are being raised on a figure of six months back, which was being released,” Garg said in an interaction with The New Indian Express.
He was responding to criticism that the government had revised down last year’s Q1 GDP to make the latest 7.8% real growth rate appear stronger.
Garg rejected the suggestion, saying such an interpretation would require the statistical agency to have anticipated the current year’s GDP figures several months in advance.
“This year's number was released two or three days back. Last year's number was revised six months back. So you are giving a lot of foresight that we thought what will be the figures in the future. I think that's quite far-fetched,” he said.
He also cautioned against comparing GDP figures across different base years without accounting for the distinction between current and constant prices. According to Garg, Q1 GDP under the new base must be compared with the corresponding measure under the new base, rather than comparing current-price estimates under one base with those under another.
On the methodology used to arrive at real GDP, Garg said the process varies across sectors. In agriculture, for instance, output data can be combined with current or constant prices, while manufacturing involves deflation of current-price estimates.
He said the revised GDP series has introduced double deflation more comprehensively, with producer prices used to deflate output and input prices to account for changes in input costs. The methodology had initially been introduced in February, with some figures subsequently recalculated following the availability of PPI data.
Garg dismissed concerns about the reliability of input-price data used in double deflation, saying MoSPI sources prices from a large number of markets, enterprises and products.
“We have all the input and output prices in the public domain, and that's why we take it from a large number of places, markets, enterprises, so that we get the correct data,” he said.
He added that MoSPI receives around 1.6 million data points every month for exercises such as the Consumer Price Index and said allegations of errors in PPI data should be backed by detailed analysis.
On criticism that the economy is not experiencing growth at the pace suggested by the 7.8% Q1 expansion, Garg said several “hard data” indicators point to strong economic activity.
He cited electricity consumption growth of around 9%, steel production growth of 8%, cement production growth of 8%, automobile growth of 16% and commercial vehicle growth of 20%. Credit growth was around 18%, while real estate growth was 24%. Growth in hotels, accommodation and food services was around 16%, he said.