To understand India’s economic growth numbers, you need to know this Russian joke - Quartz
The Russians have a great joke about every misfortune they have to endure.
One of the best I have heard is about Lenin, Stalin, Khrushchev and Brezhnev traveling together on a train when it unexpectedly stops. Then come suggestions to fix the problem. Lenin suggests a
subbotnik, or day of voluntary labour, so that workers and peasants can fix the problem. Nothing happens. Stalin puts his head out of the window and shouts that if the train doesn’t move immediately the engine driver will be shot. Nothing happens. Khrushchev then suggests to have the rails from behind put in front so that the train can start moving. Nothing happens. When his turn comes, Brezhnev says: “Comrades, lets draw the curtains, turn on the gramophone and pretend we are moving!”
There is a similar air of eyes shut make believe in this government’s first year euphoria.
The gross domestic product (GDP) growth rate was tweaked a bit by it in February to put India on a higher trajectory—giving itself an added 2.2% growth as a bonus. In China, this propensity is called adding some water to the milk. Too bad it was not announced by the Manmohan Singh government because then the growth in its last year would have been a good-looking 6.9% instead of the dismal 4.7% calculated then. It just means that in the year since the United Progressive Alliance (UPA) went out, the GDP has grown a mere 0.5%, but this government claims a healthy GDP growth of 7.4% allowing it to ecstatically claim outpacing China. Take out the bonus of 2.2% it gave itself and you have a more plausible growth of 5.2%, which is in line with the International Monetary Fund forecast.
The GDP growth 2010-11 was calculated based on factor cost, which has now been changed to constant prices to take into account gross value addition in goods and services as well as indirect taxes. Besides, the base year has been shifted to 2011-12 from 2004-05 earlier. This revision has led to some economists including Reserve Bank of India governor Raghuram Rajan seeking “more clarity.” But it seems the government is paying no heed to this. The curtains have been drawn and they are making believe that they now have the nation on a high-speed train.
