Private capex just refuses to move, it's a crisis of confidence

Former chief statistician Pronab Sen discusses the recent "large" revisions in the national income data by the National Statistical Office, the nature of the current growth slowdown, and the medium- to long-term prospects of the economy, in an interview with Priyansh Verma and KG Narendranath.

- Pronab Sen

Former chief statistician Pronab Sen discusses the recent "large" revisions in the national income data by the National Statistical Office, the nature of the current growth slowdown, and the medium- to long-term prospects of the economy, in an interview with Priyansh Verma and KG Narendranath. Excerpts:

Are the revisions in GDP numbers, particularly for FY24, due to additional data being captured? Are we now getting some new data that weren't available earlier? In this scenario, are the current series of GDP figures in the recent years strictly comparable?

The data collected are the same. With data gathered, GDP estimates get revised. As far as FY24 is concerned (for the year, GDP growth print was revised by 100 basis points to 9.2%), the revised number was reflecting the data from unlisted companies. All economists had expected that listed companies, especially the larger ones, had done better than the smaller, unlisted firms, but the data turned out to be contrary to that notion.

The same methodology of publishing GDP data based on listed companies first, then adding unlisted companies' data was followed previously as well. But the divergence wasn't so stark. What might have happened this time?

Earlier, we used to get unregistered (unincorporated) company data once in five years. Until the next data came in, NSO was just extrapolating. So, there was a basic stability in data, which have been captured annually since 2021-22, leading to fresh readings.

Is there any other kind of statistical problem with large revisions? Technically, I don't see any. But the real question is the revision that has happened goes against the understanding of most economists. The only interpretation is that smaller companies have done much better than the larger ones.