Dogged by questions on the credibility of its data, the government has initiated revision of base year for calculating the gross domestic product (GDP). The exercise will not only bring the GDP base year to 2011-12 from 2004-05 but could also see a rise in growth rates as it would factor in data from excluded sectors.
“The exercise will take about three to four years to be completed,” country’s chief statistician TCA Anant said.
The move comes at a time when the economy is battling a slowdown and registered a mere 6.5 per cent GPD growth in 2011-12. The Central Statistics Office is already working on revising the base year and the basket for the Index of Industrial Production.
Anant said that exercise will also review the methodology of collecting data and will try to include international accounting changes.
As part of the base revision exercise, the ministry of statistics and programme implementation will also focus on compiling data on the unorganised sector, whose contribution is not measured accurately in the present method. While the sector contributes nearly half of the country’s GDP, it is only captured through five yearly surveys by the CSO.
The new methodology would also try to compile data on value added services, on which there is no formal data.
A recent study by Crisil has questioned the current method of computing GDP and said that it underestimates the size and growth of the Indian economy.