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The Southern India Mills’ Association

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Year ender 2018: The release of GDP back series was long overdue

A back series by definition, looks back. But the back series of GDP data released by the Central Statistics Office (CSO) in November has created a controversy that raises doubts about the credibility of Indian statistics. The release of the GDP back series was long overdue — since January 2015 when the national accounts data was released with the new base year of 2011-12. It was known that the series would need to post the GDP data for some years before 2011-12 on the new base to make those comparable with the new series. Since there has been a change of government, the numbers were also political fodder. In July, an expert committee set up by the National Statistical Commission released a series to show that GDP grew even faster than was estimated for some years under the United Progressive Alliance (UPA). This inconvenient truth caused the government a rethink. In November, a reassessment under the aegis of the NITI Aayog lowered the estimates for some of the same years. The GDP growth rate during UPA’s ten-year term averaged 6.7 per cent annually compared with the National Democratic Alliance average of 7.35 per cent. As a Business Standard edit noted: “The data does not align with that from the real economy”. The comparison problem emerges in the back series when prices held constant. Statisticians calculate GDP on current prices and then re-estimate those using what they call deflators. These deflators are a mix of consumer and wholesale prices but can introduce an element of subjectivity. Independent experts have this gripe with the back series. It would be resolved only when the CSO releases data on how those deflators were calculated. India could have well done without this controversy.