 "GDP growth could surpass 8% in FY17: R B Barman")
In his first interview since taking over, R B Barman, the newly appointed chairperson of National Statistical Commission (NSC), tells Dilasha Seth that India’s economic growth exceeding the eight per cent mark in 2016-17 is a distinct possibility. This would be backed by agriculture sector growth surpassing the 3-4 per cent rate if monsoon turned out to be well spread as predicted, he adds. Edited excerpts:
India’s economy grew 7.6 per cent in 2015-16 and the fourth quarter of the year yielded 7.9 per cent growth rate. What is your growth forecast for 2016-17?
Given the momentum, if the monsoon turns out as predicted with precipitation well spread, the growth in agriculture will well surpass the trend rate of three per cent to about four per cent, as the base effect will contribute at least one per cent more. This is likely to result in a positive income effect on consumption demand and so on.
Experts and economists are still coming to terms with the new methodology of the GDP. Many are finding it difficult to corroborate the numbers with the situation on the ground...
The GDP estimation methodology is thoroughly examined by the Advisory Committee on National Accounts under the guidance of some of the best experts. The Committee examines various options and decides on the methodology which is the most suited under a given situation. It is necessary to continue with a methodology for comparability till revision overtakes the earlier method.
As I understand, certain issues have been raised relating to indices being used for deflation of a few items to convert them into constant prices. Work is in progress to construct appropriate indices for the services sector.
WPI (whole-sale price index) and IIP (index of industrial production) are also due for revision of base. NSSO (National Sample Survey Organisation) will undertake a nation-wide survey to collect relevant data on the services sector in GDP. We will examine how to take this work forward for the revision of methodology, when due. However, it is not advisable to undertake ad-hoc measures as such actions might compromise the cause of comparability.
Is there scope for further improvement in the GDP methodology, taking into account the suggestions from outside experts and the finance ministry?
Improvement of methodology is an ongoing process. All suggestions will be considered by the committee on merit.
A three-member committee under former NSC chairman Pronab Sen had worked on audit report and found the GDP numbers under the new methodology to be perfect. However, it has flagged discrepancies arising on account of the Annual Survey of Industries numbers. What will be the course correction going forward?
NSC will examine the report when made available and take a view. At this stage, NSC does not have any view on this.
What are the broad issues that the NSC will look into over the next six months to a year?
As set out in the Report of National Statistical Commission headed by C Rangarajan, “The adequacy, credibility and timeliness of the data generated by the statistical system are essential for the purpose of policy formulation and for monitoring the progress of various sectors of the economy.” NSC is constituted as an independent statistical authority to advise the government towards this end. NSC has made significant progress in this direction in the past decade. We look forward to making use of advanced technology to ensure the quality of collected data, data governance and analytics for a multi-dimensional view of processed data to enhance credibility and timeliness. We have a well set system of developing methodology consistent with concepts and definitions set out for international comparability. The feedback from the users is extremely useful in flagging issues for further improvement. NSC will consider these issues for appropriate action involving all stake holders.
India’s economy grew 7.6 per cent in 2015-16 and the fourth quarter of the year yielded 7.9 per cent growth rate. What is your growth forecast for 2016-17?
Given the momentum, if the monsoon turns out as predicted with precipitation well spread, the growth in agriculture will well surpass the trend rate of three per cent to about four per cent, as the base effect will contribute at least one per cent more. This is likely to result in a positive income effect on consumption demand and so on.
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The downside risk is the possibility of oil price rise and not so favourable global economy impacting consumption, investment and net exports. The contribution of the government sector is likely to improve further through the ongoing investment in infrastructure and other policy measures for attracting foreign capital. On the whole, GDP growth surpassing eight per cent in FY17 is a distinct possibility.
Experts and economists are still coming to terms with the new methodology of the GDP. Many are finding it difficult to corroborate the numbers with the situation on the ground...
The GDP estimation methodology is thoroughly examined by the Advisory Committee on National Accounts under the guidance of some of the best experts. The Committee examines various options and decides on the methodology which is the most suited under a given situation. It is necessary to continue with a methodology for comparability till revision overtakes the earlier method.
As I understand, certain issues have been raised relating to indices being used for deflation of a few items to convert them into constant prices. Work is in progress to construct appropriate indices for the services sector.
WPI (whole-sale price index) and IIP (index of industrial production) are also due for revision of base. NSSO (National Sample Survey Organisation) will undertake a nation-wide survey to collect relevant data on the services sector in GDP. We will examine how to take this work forward for the revision of methodology, when due. However, it is not advisable to undertake ad-hoc measures as such actions might compromise the cause of comparability.
Is there scope for further improvement in the GDP methodology, taking into account the suggestions from outside experts and the finance ministry?
Improvement of methodology is an ongoing process. All suggestions will be considered by the committee on merit.
A three-member committee under former NSC chairman Pronab Sen had worked on audit report and found the GDP numbers under the new methodology to be perfect. However, it has flagged discrepancies arising on account of the Annual Survey of Industries numbers. What will be the course correction going forward?
NSC will examine the report when made available and take a view. At this stage, NSC does not have any view on this.
What are the broad issues that the NSC will look into over the next six months to a year?
As set out in the Report of National Statistical Commission headed by C Rangarajan, “The adequacy, credibility and timeliness of the data generated by the statistical system are essential for the purpose of policy formulation and for monitoring the progress of various sectors of the economy.” NSC is constituted as an independent statistical authority to advise the government towards this end. NSC has made significant progress in this direction in the past decade. We look forward to making use of advanced technology to ensure the quality of collected data, data governance and analytics for a multi-dimensional view of processed data to enhance credibility and timeliness. We have a well set system of developing methodology consistent with concepts and definitions set out for international comparability. The feedback from the users is extremely useful in flagging issues for further improvement. NSC will consider these issues for appropriate action involving all stake holders.