GDP back series data: New figures throw up a productivity puzzle

Gross fixed capital formation, which connotes investment in the economy, had touched a high of 35.8 per cent in 2007-08, declining thereafter to 28.5 per cent in 2017-18

The new gross domestic product (GDP) back series released by the central statistics office (CSO) on Wednesday has generated much controversy. 

While much of the discourse has centered on the comparative performance of the economy under the UPA and NDA governments, an equally critical issue is what has happened to productivity over this period. 

Gross fixed capital formation (GFCF), which connotes investment in the economy, had touched a high of 35.8 per cent in 2007-08, declining thereafter to 28.5 per cent in 2017-18. Yet, economic growth has risen over this period. Why? What does this say about productivity over this period? 

One way