Is it possible that GDP was over-estimated and no one knew about it, including economists in govt? | The Indian Express

Is it possible that GDP was over-estimated and no one knew about it, including economists in govt? | The Indian Express

Written by Surjit S Bhalla |Updated: June 15, 2019 8:29:57 am

The writer is Contributing Editor at The Indian Express, and Consulting Editor at Network 18

Is it possible that GDP was over-estimated and no one knew about it, including economists in govt?

Is it possible that growth was over-estimated by a large 250 bps a year for five years and no one knew about it, including economists in government?

Given that the official GDP growth for this period was 7 per cent, there is an average overstatement in the official GDP statistics of around 2.5 percentage points (ppt) a year.  Illustration: C R Sasikumar

Former Chief Economic Adviser to the Ministry of Finance, Arvind Subramanian (hereafter AS) contends in a working paper at the prestigious Harvard University that India’s GDP growth between 2012 and 2016 (period II) likely averaged somewhere between 3.5 and 5.5 per cent yielding an average AS growth of 4.5 per cent.