The Indian economy grew at a faster clip in two terms of the UPA government between 2004-05 and 2013-14, when compared with average growth recorded in the first four years of the NDA government, according to new back series data released by a committee that was tasked with recommending ways to strengthen India’s data collection system.
The average economic growth rate, or Gross Domestic Product at factor cost, was 8.87 per cent during the first term (2004-05 to 2008-09) of the UPA government, which fell to 7.39 per cent during its second term (2009-10 to 2013-14). In contrast, the average growth rate in first four years of the NDA government was recorded at 7.35 per cent (2014-15 to 2017-18).
This data was presented in a report of the Committee on Real Sector Statistics, which was submitted to the National Statistical Commission recently. The data shows that the only year India grew in double digits was 2006-07 when growth touched 10.08 per cent. Growth fell to 7.16 per cent in 2008-09, as the global financial crisis of 2008 affected financial markets and economies across the world. In last two years of UPA government, the growth rate fell to 5.42 per cent and 6.05 per cent, respectively, in 2012-13 and 2013-14.
“The GDP backseries data is finally out. It proves that like-for-like, the economy under both UPA terms (10 year avg: 8.1%) outperformed the Modi Govt (Avg 7.3%) . The UPA also delivered the only instance of double-digit annual growth in modern Indian history,” the Congress said in a tweet.
Change in the base year to 2011-12 for calculation of national accounts made past data somewhat incomparable. That’s why the report compares growth rates between old series (2004-05) and new series based on 2011-12 prices.
It was presented to the Advisory Committee on National Accounts Statistics which may take cognizance of these estimates when it finalises the back-series data.
In its report, the Committee on Real Sector Statistics, noted that the difference between the economic growth rates in the old series (2004-05 base) and the new back series (2011-12 base) is minimal. The Committee, chaired by Sudipto Mundle, Emeritus Professor at the National Institute of Public Finance and Policy (NIPFP), has generated a new back series on national output up to 1993-94 with 2011-12 as the base year.
“Availability of consistent and long time series data of GDP in India is an issue due to frequent changes in the base years. The change in the base period from 2004-05 to 2011-12 at the all-India level has led to this problem…In this note, an attempt has been made to generate back series using production shift approach,” the Committee said in its report.
“We have also estimated the growth rates at the aggregate level and it may be noted that the difference between the growth rates in the old series (2004-05 base) and the new back series (2011-12 base) are minimal,” it added. The Committee said that “the estimates of gross domestic product and other related aggregates for the period 1993-94 to 2013-14 using the production shift method are being presented to the National Statistical Commission for consideration.”
“The purpose of this report is to present long-time back-series data on national production, which helps people in developing a better understanding of the macro-economy and its management,” N R Bhanumurthy, Professor at NIPFP and a member of the Committee told The Indian Express.
He said there are various ways in which back-series data can be calculated and the committee used the production shift method. Since the new GDP revision represents the value addition in goods, it eliminates redundant goods and makes way for commodities currently under production. For instance, when computers replaced typewriters, the latter are taken out of back-series calculation.