A report on GDP back series data prepared by the National Statistical Commission was released on the website of the Ministry of Statistics and Programme Implementation (MOSPI) on Friday. According to the new back series, Indian economy clocked the highest growth rate of 10.08 per cent in 2006-07 under the first UPA government led by then Prime Minister Manmohan Singh.
First let us understand what are back series calculations.
Back series calculations are being done to link a new series of national accounts with an old series. It gives an elaborated comparison of growth over the years.
What exactly are the findings of the report?
The report compared growth rates between old series (2004-05) and new series based on 2011-12 prices. It has adjusted the GDP figures from 2005-06 to 2014-15 based on the new base period adopted in 2015. As per the old series (2004-05), the expansion in the Gross Domestic Product (GDP) at constant prices was 9.57 per cent during 2006-07, when Manmohan Singh was prime minister. As per the new series (2011-12), the growth number stands revised at 10.08 per cent.
It also showed that the highest ever growth rate since Independence was recorded at 10.2% in 1988-89 when Rajiv Gandhi was prime minister.
It should be noted that this is the highest growth rate recorded by the country after launch of the economic liberalisation programme launched by then Prime Minister P V Narasimha Rao.
A lookback
The data also show that as per the old series based on 2004-05 prices, India's GDP growth was recorded at 8 per cent, 4.15 per cent, 5.39 per cent, 3.88 per cent and 7.93 per cent in 1999-00, 2000-01, 2001-02, 2002-03, 2003-04 respectively when late Atal Bihari Vajpayee was the prime minister. If calculated on the basis of the new series, the GDP rates for these years were 7.28 per cent, 3.93 per cent, 5.26 per cent and 8.22 per cent respectively.
What does it mean and why are these numbers relevant?
India shifted to a new base period of 2011-12 while calculating GDP. This lead to an upsurge in GDP growth numbers and BJP leaders including PM took potshots at UPA for failing to grow the economy at a faster speed. Hence Friday's data come as sort of vindication for the Congress leaders.
What are the methods used for calculating back series data?
The Mundle committee has stated three approaches to generate the back series: The current methodology using base data (if available); a production shift approach and project the old series using the base year of 2004-05 forward up to a certain year and then adjusting it to the 2011-12 base by comparing it to the new series.
The committee’s report said that it has followed the production-shift approach. It said that the method is different from the approach used in the unpublished “tentative estimates” done by the CSO which has relied on a similar methodology used for calculating GDP figures under the 2011-12 series.
