The “example GDP back series” published last month was based on the “second-best option” in the absence of comparable numbers for earlier years, the head of the panel that prepared the data told The Indian Express on Sunday.
India switched to the base year 2011-’12 three years ago to calculate its economic growth. Data for earlier years, therefore, was considered incomparable to the data for later years. The government had asked the Committee on Real Sector Statistics to find “back-series” numbers – or older data based on the new calculation method. The committee submitted its report to the National Statistical Commission in July.
In an interview with The Indian Express, the committee’s chairperson Sudipto Mundle said the new series uses an “unbelievably rich data source” from the Ministry of Corporate Affairs. However, such data is not available for earlier years, he said, adding that this was why the Central Statistical Organisation struggled to come up with the back series and his committee was set up.
“Traditionally, one would go backward using the data sources you have, but that was not possible because the new series is based on a more robust database than the old series,” Mundle said. “You could not use this new data source backward [to compute the back-series], because it didn’t exist. You couldn’t go beyond a few years.”
He added: “For a few back years, they could use MCA21 [the new data source], then for a few more years, they could use a private source, CMIE [Centre for Monitoring Indian Economy], which has a limited database. You could not get back much beyond that.”
The “second-best” option to estimate economic growth for years before 2011-’12, therefore, was the “production shift method”, Mundle said.
The back series estimates submitted in July show India has achieved GDP growth of over 10% twice since the opening up of the economy in 1991, both times during the Congress-led United Progressive Alliance’s rule. The numbers were earlier thought to be slightly lower. However, after the Mundle committee’s findings were reported in the media, the government said the data was not final and other methods of calculating the back series were also being explored.