Raising questions about the new methodology pushing up the gross domestic product (GDP) forecast to 7.4 per cent for the current financial year, economists have said it is not in sync with key parameters such as tax collections and credit growth.
"The (GDP) data released on Monday has only added to the confusion that already exists," said a report by HDFC Bank. Credit rating agency CRISIL observed in its report that some "high frequency indicators go out of whack" as credit growth and service tax collections were not in tune with the CSO's growth projections.
A report prepared by ING Vysya Bank said: "The high growth figures do not corroborate with the developments on the ground. The divergences between the high frequency data and GDP growth under the new methodology are blatantly stark. Muted corporate performances, worsening asset quality of the banks, weak auto sales and overall industrial production along with non-oil non-gold imports all have been pointing towards a sluggish recovery."
Icrier economist Abheek Barua said: "All the economists have been grappling to interpret the data. So far it is seen in conjunction with the multiple indicators seen on the ground. I think, slowly we will get used to this new method of data."
