Arun Jaitley says revised GDP growth rate more credible; hits back at Congress' criticism

Finance Minister Arun Jaitley today defended the new GDP series which was released on Wednesday. Calling it a conventional exercise, the Finance Minister called the revised GDP series more credible and reflective of the actual state of the Indian economy. The Modi government has drawn flak from the Congress for the new GDP series which has shaved almost one per cent off the average GDP growth during the UPA regime.

"In the last two years of UPA government, which are years 2012-13 and 2013-14, curiously at that time, the revision had made the GDP grow upwards. At that time it was welcomed by the people in the then government. In fact they said that the new GDP series has conclusively established that we did not mismanage the economy. Now in continuation of the same exercise, applying the same yardstick, the new series has been made applicable," Jaitley said while addressing a press conference on Thursday.

With the 2019 Lok Sabha elections only months away, Chief Statistician Pravin Srivastava announced the revised numbers based on back series data alongside Niti Aayog vice chairman Rajiv Kumar on Wednesday. Recalibrating data of past years using 2011-12 as the base year instead of 2004-05, the Central Statistics Office (CSO) estimated that India's GDP grew by 8.5 per cent in the fiscal 2010-11 under the UPA regime, and not at 10.3 per cent as previously estimated.

Similarly, 9.3 per cent growth rate each in 2005-06 and 2006-07 was lowered to 7.9 per cent and 8.1 per cent, respectively, while 7.7 per cent rate was estimated for 2007-08 instead of 9.8 per cent. Irked with the lowered GDP numbers, former Finance Minister P Chidambaram likened the revised GDP rates to a "hatchet job" and something "worse than a bad joke".

"The growth on the basis of the new series may be revised upwards or downwards depending on the applicability of the data; the formula is the same. When you compare GDP from 2004-05 till 2018, you can't have two different periods with two different yardsticks. Now based on the same yardstick, for the earlier eight years of UPA, the GDP had been revised downwards. So you gain in some years you lose in some years. What was welcomed by the UPA in 2015 is now being criticised in the year 2018 because it revises it downwards," Jaitley said.

Coming forward in defense of CSO and the data released by it, Jaitley said, "CSO is a crdebile organisation. It completely maintains an arm's length distance from the Finance Ministry. In fact, we also come to know of the data only when it is finally released. All former individuals and very eminent people who have headed the CSO are of the same opinion that this data is far more inclusive and far more reflective of the situation of the Indian economy, and therefore, has far greater credibility."