The great Indian GDP controversy needn't have arisen

Action is finally being taken by our statistics ministry that could've been initiated a decade ago

- PRAMIT BHATTACHARYA

Ten years after India's last gross domestic product (GDP) series was released, the Union ministry of statistics and programme implementation (Mospi) has announced the release of a revamped series next year. The new series will replace one of the most contentious national accounts series in the country's history.

This is perhaps a good time to understand how and why India's current GDP series became so controversial. Immediately after the GDP series was released in early 2015 (with 2011-12 as its base year), economists and policymakers began questioning the accuracy of the numbers, as it seemed to contradict other economic indicators.

The controversy took a sharper turn when one of the experts involved in the revision exercise (economist R. Nagaraj) said that he was not consulted during the finalization of the methodology and published a critique of it in the Economic and Political Weekly. Mospi officials responded to that critique. But questions about the new series persisted, with data users raising doubts about other changes in the new series.

As the technical debate progressed, the issue also acquired a political hue. Since the new series was launched soon after a new government led by Narendra Modi had taken charge in mid-2014, some commentators smelt something amiss. Pressure from the Prime Minister's Office (PMO) may have led Mospi to overestimate GDP growth rates, these critics feared.