It is now more than a year since India moved to a new method to calculate the size of its economy, but the debates continue. First, there is the divergence between factory output in the index of industrial production and the industrial growth figures used in the national income accounts based on the ministry of corporate affairs database. Second, the technical issue of what inflation measure to use when nominal values are deflated to give real values. Third, the difference between estimates of growth based on gross value added and gross domestic product; the former strips out the effects of indirect taxes and subsidies.
It is now more than a year since India moved to a new method to calculate the size of its economy, but the debates continue. First, there is the divergence between factory output in the index of industrial production and the industrial growth figures used in the national income accounts based on the ministry of corporate affairs database. Second, the technical issue of what inflation measure to use when nominal values are deflated to give real values. Third, the difference between estimates of growth based on gross value added and gross domestic product; the former strips out the effects of indirect taxes and subsidies.
An older problem—of why discrepancies on the demand side are so large in some quarters—has got a fresh airing in the latest numbers. They were highlighted in an analysis in this newspaper.
Credible economic data is a public good. Official statisticians need to do a better job explaining—not necessarily because their numbers are wrong but because the credibility of these numbers is at stake
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