Surveys, including the recently leaked one on consumer expenditure, point to the economy’s dire state
How fast has India grown lately? And, what are the yardsticks on which the country’s performance is being measured? These have remained contentious questions. Following the last decade’s boom, the economy was slowing after 2011-2012, but apparently turned around under the National Democratic Alliance (NDA) regime. Until very recently, the government claimed the economic success was based on a consumption-led growth model, as against investment-led growth in the previous decade.
In early 2015, the Central Statistics Office (CSO) released a new series of National Accounts with the base year of 2011-2012, replacing the earlier series with 2004-2005 as the base year. This is a routine exercise for any statistical office. Surprisingly, however, the annual GDP growth rates were distinctly higher in the new series compared to the old series: the growth rate for 2013-2014 went up sharply from 4.8% in the old series to 6.2% in the new series. Similarly, the manufacturing sector growth rate for 2013-2014 moved up from (-)0.7% to (+)5.3%. The revised estimates drew widespread scepticism as they were out of line with economic correlates, such as bank credit growth, industrial capacity utilisation and growth in fixed investments, all of which showed a downward trend.
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