Questionable Numbers

Is Indian GDP data going the Chinese way? A day before Interim Budget 2019/20, the Central Statistics Office released surprising GDP growth numbers - 8.2 per cent for 2016/17 and 7.2 per cent for 2017/18 - when the economy was hit by both demonetisation and GST. The earlier numbers were 7.1 per cent and 6.7 per cent, respectively. The revision is due to new agri and industrial production, government expenditure data. "We are slightly surprised by the extent of the revision in construction and real estate," says Kotak's research team.

These sectors were hit by the note ban and GST. SBI's research department said, "A surge in consumption expenditure in 2016/17 is possibly because of people unlocking cash and converting it to purchases." The revised data scores a point that average growth under the BJP government at 7.6 per cent is higher than the 6.7 per cent average under UPA-II. Given the single-digit credit growth and delayed capex cycle, the number raises doubts. Recent farm loan waivers and a Rs  75,000 crore for marginal farmers, as direct transfer in the Budget shows the true picture of the state of the economy.