Amid the ongoing debate over the credibility of India’s latest estimates, the has welcomed the country’s efforts to modernise its statistical framework, saying the incorporation of a new Index of Industrial Production (IIP) and Producer Price Index (PPI) series should help improve the accuracy of GDP estimates.
“The latest GDP release that we just talked about incorporated both a new index of industrial production, and a new producer price index series, and those two new series should help improve India’s GDP estimates,” Julie Kozack, Director of the Communications Department, IMF, said in response to a question from PTI.
IMF welcomes steps taken by India
She said the IMF welcomes these important steps that India is taking to modernise its macroeconomic statistics.
“We, of course, encourage the authorities to continue to further strengthen the statistical framework and data quality along the lines that they’re progressing,” Kozack said at the monthly briefing here.
She said India’s real GDP in the second quarter grew by 7.8 per cent which was above the IMF’s staff expectations, and also the consensus among other observers.
“This upward surprise was driven by stronger-than-expected activity in the services sector, and also in exports,” Kozack said.
“I think what we would say is the outcome also underscores the resilience of the Indian economy, despite the energy price shock. And it also means that, as we’ve been saying for quite some time, that India does remain a key growth engine for the world,” the IMF official said.
Row over GDP growth figures
A political row broke out over the better than expected GDP growth figures – 7.8 per cent for the June quarter – released by the government which were contested by former Finance Secretary .
Garg claimed the GDP data was artificially boosted by compressing the previous year’s figures.
Garg claimed that the current prices GDP last year was ₹86 lakh crore, which was revised down to ₹80 lakh crore, and that had that not been done GDP growth would have been only 2.6 per cent.
The former finance secretary’s claims were latched on by the opposition parties, who questioned the integrity of the government’s GDP data.
Chief Economic Advisor V Anantha Nageshwaran termed Garg’s approach as “cherry-picking” of data.
He said the latest GDP figures were compiled using the financial year ending in March 2023 as the new base, and a change in methodology led to revisions to last year’s quarterly data.