The first cut of the back series of GDP numbers based on the new methodology and new base year of 2011-12 have finally been released. The Central Statistics Office will confirm this, sooner or later. What the new series does show is that India is capable of attaining double-digit growth (10.2% in 2007-08 and 10.8% in 2010-11), and of recovering fast from a sharp slowdown inflicted by global developments (growth more than halved in 2008-09 to 4.2% from the previous year and rebounded to 8.8% the following year). This should be a matter of non-partisan satisfaction to all concerned, but the noise around the new back series data all relate to comparisons of NDA vs UPA economic management.
The facts are as follows. The compound average annual growth rate over the UPA’s 10 years was an impressive 8%. Gross fixed capital formation as a proportion of GDP in current prices went up from 29% in the last year of NDA-1to 33% in the first year of UPA, touched a high of 36.7% in 2007-08 and slipped below 33% only in 2013-14, when it was still 31.3%. It fell to 30% the following year and has remained stuck at 28.5% thereafter. Without a step-up in investment, growth cannot reach its full double-digit potential.
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