Taken at face value, India on Monday became the fastest growing major economy in the world after its statisticians changed the way they measure Asia's third-largest economy and showed it clocked faster growth than China in the December quarter.
It marks a dramatic turnaround for an economy that a fortnight ago was assumed to be struggling to gain momentum under Prime Minister Narendra Modi's reform-minded government…
…The statistical recovery is in large measure due to changes both in the way authorities calculate gross domestic product (GDP) and the base year…
…The reading has left economists confounded as it is at odds with other indicators such as industrial production, trade and tax collection figures, which suggest the economy is still suffering from slack.
"The government has itself been saying that tax collections are slow due to a slowdown in the economy, but the other wing of the government is saying that GDP growth has been good," said A. Prasanna, economist at ICICI Securities Primary Dealership Ltd.
"That means either one part of the economy is not taxed or there is an issue with the data."
India now measures GDP by market prices instead of factor costs, to take into account gross value addition in goods and services as well as indirect taxes. The base year has been shifted to 2011/12 from 2004/05 earlier…
"NOTHING HAS CHANGED"
…"There is clearly the need to look at the credibility associated with these numbers," said Jyotinder Kaur, principal economist at HDFC Bank. "Nothing on the ground has substantially changed to show that we are out of the trenches."
I have always maintained that just about ANY statistical figure (however ridiculous it may be) can be held as correct with an appropriate footnote in the respective report.
Revisions to the way India calculates its gross domestic product have raised reported growth rates but reduced the size of Asia's third-largest economy, creating uncertainty over the outlook for economic and monetary policy [Link].
Sigh… if a salesman starts to dictate how the account books are to be maintained… phir confusion hona tou swabhaavik hai. Let's hope the BRILLIANT MINDS engaged in this COOKING process can drum up some idiotic crap to make this nonsense a bit easier to swallow.
Dikhaawon pe mat jaao. APNI AKAL LADAAO.