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A team of International Monetary Fund (IMF) will come to meet officials of Central Statistics Office (CSO) on Wednesday to advise them on the methodology for back-series gross domestic product (GDP) data, demanded by many including the Reserve Bank of India and Asian Development Bank (ADB).
Sources said IMF has standards for national accounts and advise the economies about back-series data whenever methodolgies change. As such, the team from IMF would advise India as well.
However, the advice would not be binding on CSO and national statistical commission would take a call on the suggestions of IMF, commission chairman Pronab Sen told Business Standard. CSO is likely to come out with back-years' data of revised gross domestic product (GDP) by the end of 2015, the sources said.
The data would be available from 1999-2000, much speedier than earlier. When a series was revised in 2010, with the base year changed from 1999-2000 to 2004-05, it took the government two and a half years to come out with the new series of earlier data.
This time, the issue becomes more important since not only was the base year changed from 2004-05 to 2011-12 but the methodology of deriving GDP, as well as sourcing of the data has changed drastically. Earlier, industrial data was primarily taken from the Index of Industrial Production (IIP) and later from the Annual Survey of Industries (ASI). Now, the industrial figures are based on company filings in MCA21, the ministry of corporate affairs' e-governance initiative, among other sources. IIP constitutes only 24 per cent of industrial data.
When asked how sourcing would be done for back-year data, as MCA21 is available only from 2007 and without the entire set of figures, sources said this would be a challenge but CSO would manage the reconciliation.
The back-series assumes importance since there is no way to compare the recent GDP growth over a long series. When everyone was worried over lacklustre economic growth rates, the new GDP figures were issued on the revised method, with the growth rate was revised to 5.1 per cent from the earlier 4.5 per cent for 2012-13 and 6.9 per cent from the earlier 4.7 per cent for 2013-14. Besides, advance estimates have pegged economic growth for 2014-15 at 7.4 per cent and the Economic Survey has projected 8.1-8.5 per cent for 2015-16.
GDP growth is now being calculated at market prices, which include indirect taxes net of subsidies. The earlier approach was based on GDP at factor cost, which excludes indirect taxes but includes subsidies. Besides, an enterprise approach was taken to calculate most of the manufacturing output. Till now, only the establishment approach was used, which means calculating unit by unit production.
On the other hand, in the enterprises approach, the activities at headquarters are taken into account. For instance, after an item is produced, various marketing and sales promotion efforts go on at the headquarters. In the new GDP data, the establishment approach is still used for small companies as they have a few plants or sometimes a single plant. But, for large companies, the enterprises approach is used. Meanwhile, CSO came out with its response to R Nagaraj's allegations in the latest issue of Economic & Political Weekly.
Nagaraj, a professor at Indira Gandhi Institute of Development Research, had alleged that the final report of CSO was much at variance with the draft report submitted by a sub-committee, in which he was a member, in terms of various parameters of non-financial private corporate sector.
