The variation in gross domestic product (GDP) data for the UPA era under the old and new series, released last week, is much less pronounced in nominal than in real term. This suggests the controversy surrounding the sharp cut in the UPA-era growth rates was perhaps stoked by the use of different deflators across data points — the old series with 2004-05 base year; the new series with 2011-12 base and the Mundle panel estimates — to compute the real GDP.
In fact, at 15%, the revised average nominal GDP growth rate during the UPA era (for nine years through FY14) is marginally higher than 14.9% calculated under the old series for 10 UPA years. Of course, the Mundle panel had calculated even higher nominal GDP growth rate (15.4%) for the UPA period. For its part, the Mundle panel retained the deflator used in the old series (2004-05 base year) to compute real GDP, while under new series, a different deflator was used factoring in updated retail and wholesale price inflation data for each segment.
Clearly, the real GDP varied much between the two series due to deflators, rather than other changes in other methodologies and sourcing of data.