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Leaving out shell companies would seriously underestimate GDP: Former Chief Statistician -Dipak Mondal

-BusinessToday.com

According to the Ministry of Corporate Affairs (MCA) there are around 9 lakh active companies are registered with the MCA after over 3.3 lakh companies were de-registered in two phases over 2017 and 2018

The National Sample Survey Office (NSSO) has found many holes in MCA-21 data used for GDP calculation, hinting that it probably overestimates the GDP. The former Chief Statistician of India Pronab Sen, though, has a completely different view on the issue.

After a business daily reported, quoting the study conducted by the NSSO, that 36 per cent of companies that are part of MCA-21 database of companies and are used in India's GDP calculations could not be traced or were wrongly classified, question have been raised in the Central Statistics Office (CSO) has been over-estimating the GDP.

Pronab Sen has a very different take on this. He says that if you leave out shell companies, you would be under-estimating the GDP seriously for the very simple reason that wealth creation is going on in the parent company but it is showing up in the books of shell companies.

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