India revises up 2013/14 GDP growth to 6.9 percent

[About.to.be.banned]

GDP growth through growth redefinition?

In the 1980s, the congress was famous for "Poverty reduction by poverty redefinition".

Did the GDP increased by redefining the base year?

I too do not understand how it happens?

For all my readings of basic economics, Base year does not have any effect on growth rate. It is more of an statistical measure and GDP in different base years is normalized. If GDP grow by just changing the base year, GDP registered on different base years would not be comparable.

Looks like a case of bad reporting.

on the other hand,our ishaq dar sahab is still using 1999-2000 as base year.

Changing base year does not make any difference on growth rate.

 

[IndoUS]

Did the GDP increased by redefining the base year?

No it would remain the same, we just adding some more things to the figures which were previously not included during calculation.

 

[ito]

Did the GDP increased by redefining the base year?

When you change the base years, you will include new sectors.

 

[nair]

Probably on a layman's point of view, they were using Inch as scale to measure now, they use centimeter .........

 

[ito]

Probably on a layman's point of view, they were using Inch as scale to measure now, they use centimeter .........

when you use let us say 2000 as base year, IT sector would have been weighted more , hence would have contributed more to the overall GDP. In 2015, mobile and other technologies are contributing more towards GDP growth than IT, but taking 2000 as base year IT would have to be weight more. So correcting the base year to 2015 would means decreasing the contribution of IT and increasing the contribution of mobile and other technologies in GDP calculations

 

[farhan_9909]

What ??
Why are they still use 15 year old base year ?.

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

 

[sancho]

Did the GDP increased by redefining the base year?

Statistics are always dependent on what base they are, the government now changed the calculation base by adding things that wasn't added before:

The revised formula, showing a faster recovery, includes under-represented and informal sectors as well as items such as smartphones and LED television sets in gross domestic product.

The question is only, that the IMF or most of the world calculated the Indias GDP in the same old way, so how does this new calculation fit in a global picture?
I wonder what now will be hyped more, NDA pushing the GDP rate to 8 or 9% soon, or the UPA showing that the economy did will even in UPA2.

 

[Levina]

image
NEW DELHI (Reuters) - India revised up its economic growth to 6.9 percent from 4.7 percent in the fiscal year to March 2014 on Friday after the government changed the formula to measure the economy, a move that will make it easier for the government to meet fiscal deficit goals.
The new measurement of gross domestic product (GDP) includes under-represented and informal economic sectors as well as items such as smart phones and LED television sets.
The government also revised its GDP for 2012/13 to 5.1 percent from 4.5 percent earlier.
New Delhi revises the method of calculating national accounts and other macro data every five years, bringing in a newer base year and adjusting for changes in the economy.
It will now use 2011/12 as the new base year, instead of 2004/05.

(Reporting by Manoj Kumar; Editing by Malini Menon)
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India revises up 2013/14 GDP growth to 6.9 percent

Okay...finance is not my field.Can somebody explain what should this revised GDP formula mean? or how is it different from the previous formula? and what were the changes made?
@DRAY @Dem!god

 

[Jaat Rock]

So, they are just adding new sectors in GDP growth calculation...
Then what there to happy about?? Its nothing

 

[AbhimanyuShrivastav]

So, they are just adding new sectors in GDP growth calculation...
Then what there to happy about?? Its nothing

Not really.. Read the article in detail

 

[SrNair]

Statistics are always dependent on what base they are, the government now changed the calculation base by adding things that wasn't added before:



The question is only, that the IMF or most of the world calculated the Indias GDP in the same old way, so how does this new calculation fit in a global picture?
I wonder what now will be hyped more, NDA pushing the GDP rate to 8 or 9% soon, or the UPA showing that the economy did will even in UPA2.

Chidambaram already took the credit.

 

[anant_s]

on the other hand,our ishaq dar sahab is still using 1999-2000 as base year.

Thats crazy. It is a standard practice globally to revise base year at regular intervals.

 

[Roybot]

The question is only, that the IMF or most of the world calculated the Indias GDP in the same old way, so how does this new calculation fit in a global picture?
I wonder what now will be hyped more, NDA pushing the GDP rate to 8 or 9% soon, or the UPA showing that the economy did will even in UPA2.

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.

The changes due to the rebasing will reflect in IMF and other "global pictures" as well.

 

[dray]

Okay...finance is not my field.Can somebody explain what should this revised GDP formula mean? or how is it different from the previous formula? and what were the changes made?
@DRAY @Dem!god

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.

 

[ChineseTiger1986]

Have you guys applied the SNA 2008 so far?

It is a good way to revise up your GDP.