BBC: India growth figures baffle economists

[Menace2Society]

If figures have not been fudged then congrats.

 

[Beidou2020]

If figures have not been fudged then congrats.

All the emerging market economies are slowing but India's 'growth' accelerates by magic.

 

[my2cents]

So whats total gdp figure now ?

New Delhi: The growth of the Indian economy is projected to accelerate to 7.4% in the current fiscal compared with 6.9% last year based on a new way of calculating gross domestic product (GDP). At this level it is estimated to be on par with China, currently the fastest growing economy in the world. It is also the first time that the economy is projected to be bigger than $2 trillion; India’s GDP is estimated to be $2.1 trillion in 2014-15. The data released on Monday, which paints a rather unexpectedly favourable picture of the Indian economy, has been met with scepticism, both from within and outside the government. While there is consensus that the economy is on the mend, economists are questioning the extent of recovery being posited by the new measure of GDP. With the first three quarters’ economic growth numbers at 6.5%, 8.2% and 7.5% respectively, the data assumes that in the fourth quarter (January-March), GDP will grow at 7.5%. The new growth numbers have been arrived at after a revision of the way GDP is calculated in India. The Central Statistics Office has revised the base year on which comparisons are made to 2011-12 from 2004-05. It has also expanded its coverage of manufacturing and included under-represented sectors and data from the corporate database of the government in arriving at the growth figure.

Read more at: India a $2.1 trillion economy under new GDP measure - Livemint

 

[Genesis]

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, and with most other countries.

2. Base year is revised from time to time to reflect more accurate picture of the GDP, all countries do that.

3. The scope of data collection has been broadened to get more accurate data. The data has become more reliable and closer to actual now.

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

Check this: Base year revision impact: FY14 GDP at 6.9%, FY13 at 5.1% - Moneycontrol.com

And Chinese economic figures are already following the 'market price', they have lesser unreported businesses and their unorganized sectors are better reported because of their more controlled economy, in fact their figures may be a bit inflated too, but I will not go into that as I am trying to improve the bilateral ties between me and @Chinese-Dragon .

I'll tell you a personal story, one of my close family operates a business, and through no corruption, they pay only about 40,000 Yuan, going by the official rate, that should be much much higher. That's the norm in China, these small to medium businesses don't really need to pay much tax, and it's not based on sales, it's mostly just whatever the Tax agencies thinks you need to pay then you pay.

The government has enough revenue from a lot of different places, and don't have schemes that drain their coffer, so they don't really need to do these things.

That's the ground reality you wouldn't know if you are not in China and in the field. China is a confusing place, there's so many things you can do and don't need to do relative to the official policy that, it's hard to be accurate on China.

China's economy is far more open than you think it is, reading Western propaganda will only confuse you.

 

[kurup]

If this change encourage more chest thumping among Indians here. Than their gov will do adjustments every few weeks to get every Indian excited. Congrats to India for being the fastest growing economy by changing the numbers. Congress should have thought of this method earlier. They might still be in power.

These ratings have not made Indians to chest thumping but it sure had made some Anti-Indians butt hurt as is evident from this thread ...

 

[vsdave2302]

It is not only India who is questioning. Infact we generally never question. Who questions?
Read this:

Local governments inflated China’s GDP by $900 billion last year

 

[Luca1]

All the emerging market economies are slowing but India's 'growth' accelerates by magic.

It's just recalculation to boost their economy. A political tool.

 

[vsdave2302]

@DRAY, @SarthakGanguly, @ito, @Jackdaws

Despite the international media being highly skeptical of these numbers, it may surprise you to know that I personally don't have an issue with the numbers.

Developing countries in general have a large amount of economic activity that doesn't find its way into official calculations, so it wouldn't surprise me if India and other developing countries are growing much faster than official numbers would suggest.

Considering India's base GDP per capita is lower than the developing world average, the new numbers aren't surprising. Having a lower base naturally means it easier to achieve a higher percentage rate of growth.

Also Modi's economic policies so far have been very good, with some extra breathing room afforded by the drop in global oil prices (and thus less of a problem with inflation, allowing more growth boosting measures).

Though it is funny how Indians always question China's growth rate, despite our economic indicators going up.

We've never had a year where our economic indicators have been falling hugely while our GDP growth rate has been soaring. Food for thought.

It is not only India who is questioning. Infact we generally never question. Who questions?
Read this:

Local governments inflated China’s GDP by $900 billion last year


It is not only India who is questioning. Infact we generally never question. Who questions?
Read this:

Local governments inflated China’s GDP by $900 billion last year

 

[Luca1]

These ratings have not made Indians to chest thumping but it sure had made some Anti-Indians butt hurt as is evident from this thread ...

You should go through the thread again. But congrats to your country for a sudden increase to your economy.

 

[Beidou2020]

It's just recalculation to boost their economy. A political tool.

Yup. Modi's political tricks I guess. Pretty sure he used this tactic in Gujarat to win the election to brainwash the gullible Indian public. He is just doing this on a national scale.

 

[SpArK]

Yup. Modi's political tricks I guess. Pretty sure he used this tactic in Gujarat to win the election to brainwash the gullible Indian public. He is just doing this on a national scale.

Here in this part of the world, its done by Finance minister, not the PM.

 

[Luca1]

Yup. Modi's political tricks I guess. Pretty sure he used this tactic in Gujarat to win the election to brainwash the gullible Indian public. He is just doing this on a national scale.

And the Indians here are so excited. They are probably wondering if they are ready to start importing white servants.

 

[Beidou2020]

Here in this part of the world, its done by Finance minister, not the PM.

Modi is a dictator. He can do anything now.

 

[my2cents]

It's just recalculation to boost their economy. A political tool.

Maybe. But why now? Elections are far away and it reflects positively on previous govt. than the present one.

 

[vsdave2302]

It is not on steroid. We had 6%+ to 9% growth rate since 2003 except couple of years even by old standard of measurement. So now Hindu growth rate has become 7% from less than 5% which it used to be few years back. So linking it with steroid doesnt seem logical. 7% is a normal growth rate now.