only slr rducd.
Waited for 3 days to hear from Ankit on this.
India’s Statistical Ministry released a note revising and updating the base .year for GDP. The exercise is nothing new and happens in every country periodically. Though there are some more changes this time. Earlier GDP was reported at Factor cost (sector-wise) and now will be reported at market prices (expenditure method) based on international practices.
However, the recent update raises many questions as India’ growth wasn’t as weak as we were told. The track record of previous government was much better than imagined. Infact the economy was already on an upswing and the recent media tamasha over how economy is improving after the new government was not really true.
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I remember Paul Merton making same observation about India, that they are just obsessed with making world records.
How much crdibl scinc in economics!!!!!!!!!!!!!!
I was reading this article by mythili bhusnurmath in et. right she suggst we should not be that rigid about the 3.6 or 4.1 targt. humans and economic are both fallible. The corporate and media in India created such a negitive before election that it was hard to believe that anything good was going on on econnomic from. The upa was revild for this. now it turn out that growth was actually whopping 6.9%. below is th article from ET.
The Indian economy is in much better shape than we had been led to believe and the improvement had set in during 2013-14, the final year of the UPA government, which had been reviled for mismanaging the economy. The present government has seen its promises being fulfilled in anticipation by the previous government on three counts. One, economic recovery. Growth was already a whopping 6.9% in 2013-14, not the measly 4.7% it was thought to be. The growth rate attained the year before, too, was above 5%, at 5.1%, not 4.5% as previously estimated. Two, Make in India has already been under implementation: the share of manufacturing in GDP for 2013-14 was 17.3%, not 12.9%. And three, inflation was already being tamed: economy-wide price rise had come down from 8% in 2012-13 to 6.6% in 2013-14.
Gross capital formation had come down in 2013-14 by 4%. But fixed capital formation had actually gone up 3%, reversing a trend. The decline in gross capital formation was on account, principally, of the clampdown by the government on gold imports, which resulted in capital expenditure on valuables coming down by a whopping 48%. The current account deficit, which had been running at 6.4% of GDP in 2011-12 and 2012-13, was contained at 1.9% of GDP in 2013-14, even as the rate of economic growth went up. This is creditable management, helped along by fiscal discipline. The previous government did a decent job of running the economy but a lousy one of noticing it and letting the public know. And the present one has an easier job of accelerating an already mending economy. Let the BJP and the Congress cooperate on this front.
All this is the upshot of a fresh picture of the economy presented by the official Central Statistical Office, which has revised GDP estimates in two ways: one, it has changed the base year from 2004-05 to 2011-12, updating the number of sectors covered and improving coverage; two, it has aligned the method of computing India’s GDP with the mainstream global practice of measuring GDP at market prices, rather than at factor cost.
Vry informative ariticl indeed from economist.