From what I have talked with top people I know in core industries like cement, food, transport, energy....no real reason not to. Of course my snapshot will vary from other financial groups snapshot and of course the whole govt's snapshot methods and data.
There may be some further lagged effects especially on GVA that kick in over a couple more quarters....but continued higher tax collection (esp when demonetisation "formalisation", taxing of deposited black money + GST kicks in) will mitigate that, maybe even be net positive this short term itself (we will get a good first indication of that end of march).
Agricultural numbers are very hard to fake. The 6% growth here (over expected 4.6% growth) will translate into more sales of motorcycles, tractors and demand for irrigation supplies etc.. (these numbers will be presented over time and we can cross-verify down the road). So can all these numbers be faked...that too getting private companies to do so? I don't think so....that's why they will be good indicators. Thats why they have been used to cross-verify previous data released by the CSO as well (and provided corrective factors).
So with that and the much better performance of manufacturing, mining etc than expected on the face of it, is it really that surprising that there is about 1% higher quarter growth than what was the weighted poll expectation of 6.1% (in ET now) ...which under-predicted growth of kharif sowing by a huge factor? This is just 1 quarter as well.....JP morgan chase was probably the best overall prediction, predicting a drop of 0.1% growth from earlier FY estimate of 7.1% to 7.0%. So its not like absolutely no one in the profession thought the short term effect would be minimal (esp given we are talking about formal economy here).
The govt should definitely make a priority in publishing the back series for better comparison with historical growth under the older methodology of factor cost...that is really the only "fake" "conspiracy" realm you guys have some chance of questioning reasonably and should be attacking to score some good points ....rather than this CSO data.
Why the govt has not done this also has various reasons (which can be explored), but the topic as far as I am aware has not even come up on this forum.
So in summary, we can wait and see what are the real physical goods numbers that materialise across the year....and then try to split their overall net change.....into how much they were adversely impacted by demonetisation +benefited by it + impacted by GST + benefited by GST. The direct levels of some of them will immediately tell us if this 7.0% growth number was a valid estimate on the face of it....but there will be a lag in when they are released across this year. In fact it is this data that will provide corrections for this quarter's growth number....and could be worse, better or negligible difference. Let's see.
Thank you for your post. Economy is not my strong point. But this is what I can do....
Posted by one of your brethren...
"No. The economy is actually being said to be growing at some level below 5% of GDP
Index of Industrial Production - DOWN
Exports from India - DOWN
Imports from outside - DOWN
WPI Inflation - BADLY DOWN
CPI Inflation - DOWN
Amount of Taxes - Rising (Service Tax+ Cesses used to be at 12.36%, now they are at 15%).
(You can verify these trends and figures.)
What these trends and figures means, it means that the demand for various products and services inside the country is more or less stagnated (means not growing), or growing at a much slower pace than it was 2 years back.
If the demand is less, obviously sale (visible in exports and imports, also WPI inflationary trends)is also less.
If less things are being sold and bought in the country, how is GDP rising or growing?
'GDP is an overall measure of the monetary value of net services and goods produced withing a country's borders in a specific time period.
So many eminent people in the country and outside has questioned the new way of calculating India's GDP (which was introduced in July 2014, after the new govt came into power), on the basis of all other relevant economic activity indicators.
The Equity Master - Finally, an Economist Explains Why the Indian GDP Growth Number Is Wrong - The 5 Minute WrapUp by Equitymaster
The Economist - The elephant in the stats
“GOVERNMENT statisticians shun the limelight, which only ever finds them when things go awry. So it is with India’s national bean counters, who are struggling to convince the world that an economy with idle factories, sagging exports and ailing banks grew by 7.5% in 2015, as their models purport to show. Ever since a new methodology for calculating GDP was adopted last year, India has appeared to be the world’s fastest-growing big economy, outpacing China. But scepticism about the data is growing even faster.”
India’s economic growth estimates overstated: Nobel laureate Deaton
Nobel Prize Winner Angus Deaton Says There Are Discrepancies in India’s Economic Data
Real GDP is growing at 5%, not 7.1%
Nikkei Asian Review : Indian economy: Analysts cast doubt on 7.6% GDP growth target- Nikkei Asian Review
Why Raghuram Rajan doesn’t trust India’s GDP numbers - Firstpost
Eleven reasons why India's 7.4% GDP growth is simply not believable - Firstpost
From last few years, people have been complaining and pointing to China fudging the real GDP growth numbers, now its going to be an year since same is happening for India’s GDP numbers as well.
Its a common practice in Corporate world for CEOs to project/show better growth of the organisation in financial terms, so that the stock markets dont react very negatively to their quarterly or annual financial results. Now the people in Govt, who wants to keep their own stock prices high (approval ratings in the general populace high), are going the same path. But the saddest part is these are the ‘elected officials’ supposed to work for the welfare of the general public, and are not expected to lie to the public."
Only human I suppose.
