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19
February 2019
 |
GDP (The
Total Investment & Insurance Solutions)
Refuting charges of destroying the credibility of Indian
data, the government said the revised GDP figures for demonetisation year was
not cooked up and, in fact, the growth rates are likely to go up further due to
the GST. "It's not cooked up at all. It's data driven and real.
Nobody has
manipulated it. It's possible that sometimes anecdotally it may appear to be an
un-understadable kind of result because of the quirkiness in data which takes
place on account of abnormal events like demonetisation," Economic Affairs
Secretary Subhash Chandra Garg told. On January 31, the government revised the
Gross Domestic Product (GDP) growth rates by 110 basis points from 7.1 per cent
to 8.2 per cent for 2016-17, the year of demonetisation, and by 50 basis points
from 6.7 per cent to 7.2 per cent for fiscal 2017-18. Garg said the growth was
reflected mainly in two sectors, construction and financial services, and was
absent in sectors like manufacturing and mining when the figures were revised.
This was primarily
because demonetisation helped the two sectors directly. "In financial
services, the growth is calculated based on several parameters like deposits
and many other. Likewise, construction activity went up at that time. There
were several incentives which were in place for taking construction activity.
The Construction activity actually went up. "It's possible that the growth
is not reflected in other areas well. There's no growth revision in
manufacturing. There's no growth revision in mining. It's possible that it may
be quirky but it's possible," Garg said, explaining the positive impact of
demonetisation on economy
Apart from defending the possibility of demonetisation jacking up GDP
rates, NITI AayogVice Chairman Rajiv Kumar went a step further to suggest that
the growth rates will see another revision upwards for the years since Goods
and Services Tax (GST) was rolled in. "By the way, this (upward revision)
will happen more with the implementation of GST as there are many sectors that
have never given tax. Now they will come inside GST. This will increase
further. Manufacturing will grow as more of the unorganised sector gets formalised.
"Revised figures can show the increase for the years since GST has been
2017-18 and 2018-19. I will not be surprised at all.
Thousands of garment makers never gave any tax, now they are doing.
Suddenly, you see garment industry larger than what it was," Kumar told
IANS. On demonetisation, he said when nearly half of the economy that was
running in black and is now included in the formal economy, it had to show the
impact. When people decide to bring out their cash, show it as income and pay
tax, it suddenly bumps up the activity, he said. Though the government defends
the recent revision of GDP figures along with the new back series of GDP data
released last November, which trimmed growth rates in UPA era making Modi
government look better in terms of growth, it rejected the recent data on jobs.
On January 31, the government rejected the leaked National Statistical
Commission (NSC) report that showed unemployment rate at a 45-year high saying
it was not finalised leading to a major backlash from the Opposition with
charges of manipulating data. "Ours is not a command economy, we don't
produce data on orders.
Ours is a decentralised and democratic management system. There are
institutions which prepare and publish the data that is there... the credibility
of Indian data remains very high," Kumar said. However, on the allegations
that NITI Aayog, which in the words of former Finance Minister Yashwant Sinha
"has nothing to do with data and statistics", got involved,
manipulated and revised the figures, Kumar said the Aayog will continue to
engage in data. "NITI Aayog by its very nature must be engaged in
improving the statistical system of India. I consider it my duty to make sure
our Indian fiscal system is modernised, strengthened and remains as credible as
ever. To that extent, NITI Aayog being the think tank that uses data for
evidence-based enquiry and policy making will continue to be involved in
data," he stated. He, however, said the Aayog will never think of usurping
whatever the Central Statistics Office (CSO) and the Ministry of Statistics and
Programme Implementation (MoSPI) does but will remain interested in working
with MoSPI to help it evolve so that the quality of data collected is improved
and is in sync with each other. The Total Investment & Insurance Solutions
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