Inclusion of industry figures could have taken Indian GDP to magical 6 per cent mark

[Chanakya's_Chant]

Inclusion of industry figures could have taken GDP to magical 6 per cent mark

Government calculations show that growth could have been as much as a percentage point higher in the past two years once data from the Annual Survey of Industries is factored in.

NEW DELHI: The UPA government has received flak for the country's growth plunging to a decade low of 5% last year, but had it paid greater attention to ensuring more accurate industrial statistics, the numbers would possibly have looked a lot better.

Government calculations show that growth could have been as much as a percentage point higher in the past two years once data from the Annual Survey of Industries is factored in.

In the advance estimates of gross domestic product, industrial growth is derived from the Index of Industrial Production (IIP), which is considered by policymakers and economists to be riddled with faults despite a recast a few years back and is again under review. GDP growth was 6.2% in 2011-12 and 5% in 2012-13. The corresponding industrial growth in these years was 3.5% and 2.1%, respectively.

The new assessment of far better numbers is based on similar revisions earlier and an analysis of corporate sales data compiled by the Reserve Bank of India.​

Advance GDP estimates for 2009-10 pegged growth at 7.2%, which was revised to 8.6% when the final numbers were available. Next year, the advance 8.6% estimate was revised to 9.3%. The revision was based on fresh data from the Annual Survey of Industries (ASI), which comes with a two-year lag.

"There is a particular chance of a substantial revision," said Pronab Sen, chairman of theNational Statistics Commission. "ASI captures activity of small units better."

The government's internal calculations based on corporate sales data suggest a significant upward revision once the final numbers are issued, an assessment private experts endorse.

The sample of companies analysed showed a 19.5% rise in sales in 2011-12 and 9.4% growth in 2012-13. Based on the past divergence in ASI and IIP data and this sales growth, the government expects final growth to be bumped up at least one percentage point in 2011-12 and a little less in 2012-13.

The ASI for 2011-12 will likely be available this week and could bring some statistical relief for the UPA, which suffered a severe drubbing in the recent assembly elections.

"We have seen significant revisions in the GDP... There is a continuous downward bias in the industrial production numbers that needs to be fixed to make the data more robust," said DK Joshi, chief economist, Crisil.

India's grew at its slowest pace in 10 years in 2012-13, as per official data. Finance minister P Chidambaram had questioned the advance estimates for 2012-13 that had pegged growth at 5%, saying it was based on "dated data". However, Joshi said directionally the story will not change. "Economy slowed in 2012-13 as compared to 2011-12," he said.​

Source:- Inclusion of industry figures could have taken GDP to magical 6 per cent mark - The Economic Times

​

 

[WAR-rior]

Inclusion of industry figures could have taken GDP to magical 6 per cent mark

Government calculations show that growth could have been as much as a percentage point higher in the past two years once data from the Annual Survey of Industries is factored in.
​

NEW DELHI: The UPA government has received flak for the country's growth plunging to a decade low of 5% last year, but had it paid greater attention to ensuring more accurate industrial statistics, the numbers would possibly have looked a lot better.

Government calculations show that growth could have been as much as a percentage point higher in the past two years once data from the Annual Survey of Industries is factored in.

In the advance estimates of gross domestic product, industrial growth is derived from the Index of Industrial Production (IIP), which is considered by policymakers and economists to be riddled with faults despite a recast a few years back and is again under review. GDP growth was 6.2% in 2011-12 and 5% in 2012-13. The corresponding industrial growth in these years was 3.5% and 2.1%, respectively.

The new assessment of far better numbers is based on similar revisions earlier and an analysis of corporate sales data compiled by the Reserve Bank of India.​

Advance GDP estimates for 2009-10 pegged growth at 7.2%, which was revised to 8.6% when the final numbers were available. Next year, the advance 8.6% estimate was revised to 9.3%. The revision was based on fresh data from the Annual Survey of Industries (ASI), which comes with a two-year lag.

"There is a particular chance of a substantial revision," said Pronab Sen, chairman of theNational Statistics Commission. "ASI captures activity of small units better."

The government's internal calculations based on corporate sales data suggest a significant upward revision once the final numbers are issued, an assessment private experts endorse.

The sample of companies analysed showed a 19.5% rise in sales in 2011-12 and 9.4% growth in 2012-13. Based on the past divergence in ASI and IIP data and this sales growth, the government expects final growth to be bumped up at least one percentage point in 2011-12 and a little less in 2012-13.

The ASI for 2011-12 will likely be available this week and could bring some statistical relief for the UPA, which suffered a severe drubbing in the recent assembly elections.

"We have seen significant revisions in the GDP... There is a continuous downward bias in the industrial production numbers that needs to be fixed to make the data more robust," said DK Joshi, chief economist, Crisil.

India's grew at its slowest pace in 10 years in 2012-13, as per official data. Finance minister P Chidambaram had questioned the advance estimates for 2012-13 that had pegged growth at 5%, saying it was based on "dated data". However, Joshi said directionally the story will not change. "Economy slowed in 2012-13 as compared to 2011-12," he said.

Source:- Inclusion of industry figures could have taken GDP to magical 6 per cent mark - The Economic Times

​

This is the difference between China and India. The figures we are talking here are included in Chinese GDP much earlier due to its swift governence whereas due to Red Tapism we guyz have to wait for a year or 2 to include it. Pathetic Bueraucricy of India.

 

[telugodu]

This is the difference between China and India. The figures we are talking here are included in Chinese GDP much earlier due to its swift governence whereas due to Red Tapism we guyz have to wait for a year or 2 to include it. Pathetic Bueraucricy of India.

And now even if we include...its of no use...

 

[conworldus]

This is the difference between China and India. The figures we are talking here are included in Chinese GDP much earlier due to its swift governence whereas due to Red Tapism we guyz have to wait for a year or 2 to include it. Pathetic Bueraucricy of India.

Sometimes I think both China and India need to be rid of the GDP obsession...

Quality of life and economic prosperity is much more than what GDP number can express. A dollar generated during a ricksaw ride in India is not the same as a dollar generated in a bakery shop in China. We value goods and services differently so the comparison is of no use.

Economics, in the end, is only a description of our perception of the world, and numbers cannot accurately describe perception.

 

[acid rain]

How does it matter much other than for d!ck measurement? I doubt any country ever gets its GDP figures right, especially so with India where a major chunk of business is unreported or does not count. Most services are unreported anyways.