13 hrs ago
IMF Backs India’s Updated GDP Data Amid Credibility Debate
India has changed some of the tools it uses to measure its economy.
These include a new industrial production index and a new producer price index.
The IMF said the changes could make GDP estimates more accurate.
GDP is a measure of how much an economy produces.
India’s economy grew 7.8% in the second quarter.
Services and exports helped make growth stronger than expected.
The IMF said this showed that India’s economy remained resilient despite an energy price shock.
However, former Finance Secretary S. C. Garg questioned the figures, while the chief economic adviser rejected his analysis.
The IMF welcomed India’s efforts to modernise its macroeconomic statistical framework.
India’s latest GDP release incorporated new Index of Industrial Production and Producer Price Index series.
The IMF said the updated series should improve the accuracy of India’s GDP estimates.
India’s real GDP grew 7.8% in the second quarter, exceeding IMF staff and consensus expectations.
Former Finance Secretary S. C. Garg disputed the figures, while the chief economic adviser called his analysis “cherry-picking.”
- Who
- The International Monetary Fund, Julie Kozack, former Finance Secretary S. C. Garg, and Chief Economic Adviser V. Anantha Nageswaran were involved in the discussion.
- What
- The IMF endorsed India’s updated statistical framework and said new IIP and PPI series should improve GDP estimates; the 7.8% growth figure was also disputed.
- Where
- At the IMF’s monthly briefing; the articles do not specify the city.
- When
- The comments were made at the IMF’s monthly briefing and concerned India’s second-quarter, or June-quarter, GDP release.
- Why
- India introduced the new statistical series to modernise its macroeconomic statistics, while the IMF urged further improvements in data quality.
Critics of the GDP figures
Defenders of the GDP figures
Credibility of the 7.8% growth rate
Critics of the GDP figures
Former Finance Secretary S. C. Garg disputed the government’s GDP figures and said growth would have been 2.6% without a downward revision to the previous year’s current-price GDP.
Defenders of the GDP figures
The IMF said the 7.8% result was above its staff expectations and the consensus of other observers, while Chief Economic Adviser V. Anantha Nageswaran described Garg’s approach as cherry-picking data.
Meaning of the revised statistical framework
Critics of the GDP figures
The ongoing debate over GDP credibility has led opposition parties to question the integrity of the government’s data.
Defenders of the GDP figures
The IMF welcomed the new IIP and PPI series, saying they should improve the accuracy of GDP estimates and represent progress in modernising India’s statistical framework.
Explanation for stronger growth
Critics of the GDP figures
Critics focus on the effect of revisions to previous-year figures in assessing the reported growth rate.
Defenders of the GDP figures
The IMF attributed the upward surprise to stronger-than-expected services activity and exports, and said it demonstrated the resilience of India’s economy despite the energy price shock.
Key facts
- GDP growth
- India’s real GDP grew 7.8% in the second quarter, or June quarter.
- New industrial measure
- The latest GDP release incorporated a new Index of Industrial Production series.
- New price measure
- The release also incorporated a new Producer Price Index series.
- IMF assessment
- The IMF said the new series should improve the accuracy of India’s GDP estimates.
- Growth drivers
- Stronger-than-expected services activity and exports drove the upward surprise.
- Statistical recommendation
- The IMF encouraged India to further strengthen its statistical framework and data quality.
- Data dispute
- S. C. Garg argued that revised previous-year figures artificially boosted growth, while V. Anantha Nageswaran called the approach cherry-picking.
Quotes
Julie Kozack
Director of the Communications Department at the International Monetary Fund
“I think what we would say is the outcome also underscores the resilience of the Indian economy, despite the energy price shock. And it also means that, you know, as we've been saying for quite some time, that India does remain a key growth engine for the world”
telegraphindia.com
“The latest GDP release that we just talked about incorporated both a new index of industrial production, and a new producer price index series, and those two new series should help improve India's GDP estimates.”
telegraphindia.com
livemint.com
Sources
Related news
IMF Welcomes India’s 7.8% Growth Amid Data Debate
Government Defends India’s 7.8% Q1 GDP Growth Amid Debate
Mishra Defends India’s 7.8% GDP Growth Against Critics
Government Defends Revised GDP Estimates Amid Growth Manipulation Claims
UPSC Key Highlights India’s Diplomacy, Economy, Climate and Science
CEA Defends 7.8% Q1 GDP Growth Estimate
RBI Forex Swap Draws $136.37 Billion, Led by FCNR(B)
India’s GDP Growth Beats Expectations at 7.8% in First Quarter
