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LATEST NEWS UPDATES | India GDP overestimation: more evidence -Nikita Kwatra

India GDP overestimation: more evidence -Nikita Kwatra

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published Published on Jul 5, 2019   modified Modified on Jul 5, 2019
-Livemint.com

India’s actual growth rate over the past few years may have been in the range of 5-5.5% over the past few years, according to a new study

Last month, a research paper by the former chief economic adviser to the finance ministry, Arvind Subramanian, reignited the controversy surrounding India’s GDP calculations. In his paper, Subramanian suggested that India’s growth rate in recent years had been grossly overestimated --- a claim that was quickly criticized by the Prime Minister’s Economic Advisory Council, which suggested that Subramanian’s methodology was unusual and led to misleading conclusions about the growth rate of Asia’s third-largest economy.

However, another study by two economists at the Indian Institute of Management Ahmedabad (IIM-A), Sebastian Morris and Tejshwi Kumari, published earlier this year, arrived at similar conclusions using techniques similar to that of Subramanian.

The duo estimated GDP growth in recent years by using proxy indicators of economic activity such as credit and exports growth to extend the old GDP (2004-05) series. Their analysis suggests that growth rates calculated using the current 2011-12 series may have overestimated the Indian economy’s real growth rate although the growth estimates they arrived at are higher than those presented by Subramanian.

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Livemint.com, 4 July, 2019, https://www.livemint.com/news/india/india-gdp-overestimation-more-evidence-1562220883872.html


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