India revises up 2013/14 GDP growth to 6.9 percent

[Levina]

1. Most economies use the 'market price' to arrive at GDP, but India was using 'cost of production' for calculating GDP, that has been corrected and now the new system is in sync with the World Bank and IMF system.

2. Base year is revised from time to time to reflect more accurate picture of GDP, nothing new here.

3. The scope of data collection has been broadened to get more accurate data. The method has become more reliable.

However, we still have a huge unorganised sector and unreported business activities (to save tax) that remains outside the scope of the GDP. Our GDP still remains under-reported.

Thank you!

 

[SrNair]

1. Most economies use the 'market price' to arrive at GDP, but India was using 'cost of production' for calculating GDP, that has been corrected and now the new system is in sync with the World Bank and IMF system.

2. Base year is revised from time to time to reflect more accurate picture of GDP, nothing new here.

3. The scope of data collection has been broadened to get more accurate data. The method has become more reliable.

However, we still have a huge unorganised sector and unreported business activities (to save tax) that remains outside the scope of the GDP. Our GDP still remains under-reported.

Dude .You are an economic expert.Specialised in economic ?PHD?

 

[sancho]

Chidambaram already took the credit.

Yeah, read it too and he surely deserves it. He was pretty good with his predictions for the growth increase in this and the coming 2 years, even without the change of the calculation.

No they do not. In fact IMF encourages countries to rebase as often as they can, to give a correct measure of the size of a country's gdp.

And still they must have a base standard to calculate the GDP for all countries on an equal base, otherwise each country could get to it's own calculation systems and the GDPs would not be comparable.

1. Most economies use the 'market price' to arrive at GDP, but India was using 'cost of production' for calculating GDP, that has been corrected and now the new system is in sync with the World Bank and IMF system.

If that's the case, wouldn't the IMF GDP data for India had shown 6.9% earlier too and not only now? Not to mention that they must predict much higher growth for this year:

IMF projects India's GDP at 6.4% in 2015

The IMF on Tuesday forecast 5.6% growth rate for India this year and a higher 6.4% in 2015, citing renewed confidence in the market due to a series of economic reforms being undertaken by the new government.

"Growth in India is expected to rise to 5.6% in 2014 and pick up further to 6.4% in 2015 as both exports and investment increase," the International Monetary Fund said in its latest World Economic Outlook report released in Washington on Tuesday.

In 2013, India's growth rate was five per cent. On the other hand in China, growth will remain at 7.4% in 2014 and is projected to be of 7.1% in 2015.

IMF projects India's GDP at 6.4% in 2015

 

[Chronos]

@nair @acetophenol @gslv mk3 @sancho @levina @Lord Zen @jarves @SpArK @kurup @ito @magudi @Ravi Nair and others.

A new development in our economy.

I read about it.

It means our overall gdp won't go up but growth rate has been revised.

This change is in keeping up with best practices of gdp calculations I believe.

Did the GDP increased by redefining the base year?

No, infact it decreased marginally.

I think.

 

[SrNair]

I read about it.

It means our overall gdp won't go up but growth rate has been revised.

This change is in keeping up with best practices of gdp calculations I believe.



No, infact it decreased marginally.

I think.

But what would be the current economic year GDP?
If it goes like this ,around 8+% is damn sure.

Yeah, read it too and he surely deserves it. He was pretty good with his predictions for the growth increase in this and the coming 2 years, even without the change of the calculation.



And still they must have a base standard to calculate the GDP for all countries on an equal base, otherwise each country could get to it's own calculation systems and the GDPs would not be comparable.



If that's the case, wouldn't the IMF GDP data for India had shown 6.9% earlier too and not only now? Not to mention that they must predict much higher growth for this year:



IMF projects India's GDP at 6.4% in 2015

Perhaps they adopted our early base year.

 

[Chronos]

But what would be the current economic year GDP?
If it goes like this ,around 8+% is damn sure.



Perhaps they adopted our early base year.

Economics is not an exact science. We shall see.

Because PPP govt could not do in 2010 or atleast once in 5 years,last time in 2005 under musharaf the base year was changed,now it is due change in FY 2015-16

Also countries like india and Pakistan has a huge shadow economy which lies outside official reporting.

 

[DJ Crudept]

Good going but all I want to see is 8% growth rate in 2017-18

 

[sancho]

But what would be the current economic year GDP?
If it goes like this ,around 8+% is damn sure.

According to all estimates before this revised calculation base, between 6 and 7%, with the revised base it should be between 8 and 9%. That's why I said, the current government surely will use that to PR high growth, especially if they can reach 10% by 2016/17 like this, while the UPA will point to their success in the past, it's just a matter of who can sell it better.

Perhaps they adopted our early base year.

Maybe, that's why I'm asking if there isn't a global standard in the IMF, of basic parts that must be in the calculation of all countries. I mean are smart phones and LED TV's included in the GDP calculations of other countries too?

 

[SrNair]

According to all estimates before this revised calculation base, between 6 and 7%, with the revised base it should be between 8 and 9%. That's why I said, the current government surely will use that to PR high growth, especially if they can reach 10% by 2016/17 like this, while the UPA will point to their success in the past, it's just a matter of who can sell it better.



Maybe, that's why I'm asking if there isn't a global standard in the IMF, of basic parts that must be in the calculation of all countries. I mean are smart phones and LED TV's included in the GDP calculations of other countries too?

Noone cant beat Modi when it comes to PR.Chidambaram was criticised Pranab when the GDP goes down during his tenure.UPA did a lot for solve economic stalemate.But now only it begins to pay off.
Considering decisiveness of current govt.It would easily touch around 10 in 2016-17 .No doubt credit will goes to NDA.

Afterall IMF is an international agency they have severe limitation to measure GDP of individual nation.They cant contradict theirs with that nations govt.Others will question the credibility of both of them.
According to 2004-05 base year we had 2500 companies .Now according to new calculation it is around 5 lakhs.AFAIK IMF also depend our govts data.
Now they will also change their tag.

I dont know theur estimation based on LCD.It is a probability because there is a lot of poor nation in this world whee large consumption of luxury items cant afford.

 

[sancho]

Chidambaram was criticised Pranab when the GDP goes down during his tenure.UPA did a lot for solve economic stalemate.But now only it begins to pay off.

Well UPA was only responsible for Indias economy and not for the global economy and as soon as Chidambaram took over the FM in 2012, the GDP gained, the Rupee got strengthened again and several bureaucratic hurdles were removed. The point now even is, with the new calculation base, the growth in his term was even exceptional during a global recession, otherwise they "just" were not bad, since 4.5 to 5% in such difficult times were still growth and even the NDA government pointed the finger to external factors India is dependent on.

Considering decisiveness of current govt.It would easily touch around 10 in 2016-17 .No doubt credit will goes to NDA.

Hehe, only based on the new calculation way, not based on a major improvement of the economy. In fact, the GDP is moving pretty much around the estimates that were given before the elections and based on the UPA 2 decisions. All the PR we have seen in the last 8 month didn't changed that much, so what we see so far still must be credited to the UPA government.
FDI increase had no effect so far, Tax reform should be an important one, but the crucial point for the new government and Indias economy / GDP will be the next month and the new budget. The expectations on actual reforms are high and if the government can deliver with credible reforms, even according the older calculation way, 7% growth should be achievable. However, the effects on the economy of the NDA decisions can be seen only in this or the coming years, while what we have seen last year till now is still based on UPA 2.

 

[dray]

And still they must have a base standard to calculate the GDP for all countries on an equal base, otherwise each country could get to it's own calculation systems and the GDPs would not be comparable.

If that's the case, wouldn't the IMF GDP data for India had shown 6.9% earlier too and not only now? Not to mention that they must predict much higher growth for this year:

IMF projects India's GDP at 6.4% in 2015

According to all estimates before this revised calculation base, between 6 and 7%, with the revised base it should be between 8 and 9%. That's why I said, the current government surely will use that to PR high growth, especially if they can reach 10% by 2016/17 like this, while the UPA will point to their success in the past, it's just a matter of who can sell it better.

Maybe, that's why I'm asking if there isn't a global standard in the IMF, of basic parts that must be in the calculation of all countries. I mean are smart phones and LED TV's included in the GDP calculations of other countries too?

GDP by definition should consider all the products & services produced domestically (Cost of production or preferably market price, that we are following now), you can understand it is practically impossible to measure all the products & services produced domestically, especially for a country like India where more than half of the population, most small business, and agricultural sector is outside the banking system and tax net. So governments follow a sampling & estimations based on measuring some key sectors/industries and indicators, like Consumer spending, Government spending, Investments made by industries, and Excess of exports over imports. Even then some of the parameters are not fully measurable, but broadening the scope of the data capturing by including more sectors, industries, etc. increases the authenticity/reliability of the outcome.

And there are not one, but several standards/methods of GDP calculation with varied results, same goes for accounting, these figures are basically indicators and not exact data, IMF or World Bank depends upon the countries for such data. Since we have updated our figures, they will update it too.

Well UPA was only responsible for Indias economy and not for the global economy and as soon as Chidambaram took over the FM in 2012, the GDP gained, the Rupee got strengthened again and several bureaucratic hurdles were removed. The point now even is, with the new calculation base, the growth in his term was even exceptional during a global recession, otherwise they "just" were not bad, since 4.5 to 5% in such difficult times were still growth and even the NDA government pointed the finger to external factors India is dependent on.

Hehe, only based on the new calculation way, not based on a major improvement of the economy. In fact, the GDP is moving pretty much around the estimates that were given before the elections and based on the UPA 2 decisions. All the PR we have seen in the last 8 month didn't changed that much, so what we see so far still must be credited to the UPA government.
FDI increase had no effect so far, Tax reform should be an important one, but the crucial point for the new government and Indias economy / GDP will be the next month and the new budget. The expectations on actual reforms are high and if the government can deliver with credible reforms, even according the older calculation way, 7% growth should be achievable. However, the effects on the economy of the NDA decisions can be seen only in this or the coming years, while what we have seen last year till now is still based on UPA 2.

Yes, Chidambaram did much better than Pranab Mukherjee who was a major disaster as a Finance Minister with all his regressive policies and questionable decisions (e.g. the retrospective tax), in fact his selection to that post was another example of party's wrong interference in the government. But even Chidambaram didn't do everything that was required to be done, the government was too weak without proper leadership. The new government is taking some very crucial and positive decisions and sending out the right kind of impression to the global community, the results will be visible in coming 2-3 years.

Follow the Jayanthi Natarajan story, how all the projects were blocked by the Environment Ministry due to both corruption and bad politics. India's prospects was hampered in several ways by the previous government, this is another such example.

With no support base, Jayanthi Natarajan staring at a political dead end? - The Times of India

Dude .You are an economic expert.Specialised in economic ?PHD?

No, economics was one of my favourite subjects apart from marketing, I did marketing from IIMC.