In January 2015, the Central Statistical Organisation had shifted to a new GDP series (base year 2011-12) with a different methodology. After four years, this week, it released the back-series estimates for the years 2004-05 to 2010-11. In the earlier 2004-05 series, the highest growth was recorded in 2010-11 at 10.3%. Now, in the back-series, it is just 8.5%. The lowest GDP performance recorded is now 3.1% in 2008-09, instead of the earlier 3.9%.
The new back-series data has a lot of reconciliation problems vis-a-vis other indicators. For instance, in 2007-08, GDP grew at 7.7% while investments rate (gross fixed capital formation) was highest at 35.8% of GDP and non-food bank credit grew at 22.4%.
The back-series has generated a political storm five months before the nation goes to polls to elect a new government. The data show that the current government has performed much better than the UPA government led by Manmohan Singh.
The old numbers show that the average GDP growth of the UPA government (2004-05 to 2013-14) was 7.8%. But the new back-series data show that the economy grew at 6.7% during this period. The current government has clocked an average of 7.4%. However, the reconciliation issue becomes quite stark when it comes to investments.
Gross fixed capital grew an average 31.5% of GDP during the UPA regime in the old series. However, in the back-series, this increased to 33.4% GDP, raising more questions on the data. Even the Index of Industrial Production, bank credit growth and exports tell a different story.
Investments remain a major concern in the current government. The GFCF-to-GDP has remained stagnant since 2015-16, suggesting that the decline in investments in the last few years is more prominent.