Govt went wrong in calculating one of the GDP figures: Mospi
The mistake was in calculating a price deflator, which is used for converting nominal GDP into real GDP, explained an official.
By PTI |
NEW DELHI: Facing embarrassment after throwing forward sharply different economic growth figures based on two different methodologies, the government will soon set the record straight on the pace of economic expansion.
According to the government data, the economy grew by 8.8 per cent in the April-June quarter based on actual expansion without accounting for taxes - a methodology known as factor cost.
At the same time, the data released by the Ministry of Statistics and Programme Implementation (Mospi) showed growth at market price, which reflects the value of the production or services that includes indirect taxes, at just 3.65 per cent.
"There were some problems in calculating GDP at market prices at constant prices, and we will come out with a corrigendum soon," an official with Ministry of Statistics and Programme Implementation (Mospi) told PTI.
Central Statistical Organisation (CSO) that releases the data is part of Mospi.
The wide difference in GDP growth numbers under the two methodologies created confusion among economists.
Experts said GDP at market price should not have been so low, since indirect taxes--excise duty--rose by two per cent this fiscal, after the government partially withdrew stimulus measures.
The mistake was in calculating a price deflator, which is used for converting nominal GDP into real GDP, explained the official.
Real GDP does not include inflation and hence considered a better indicator of an economy. Also, when economic growth rate is defined, real GDP is used, rather than nominal GDP. PTI IJD RHP KM 09011557 NNNN
According to the government data, the economy grew by 8.8 per cent in the April-June quarter based on actual expansion without accounting for taxes - a methodology known as factor cost.
At the same time, the data released by the Ministry of Statistics and Programme Implementation (Mospi) showed growth at market price, which reflects the value of the production or services that includes indirect taxes, at just 3.65 per cent.
"There were some problems in calculating GDP at market prices at constant prices, and we will come out with a corrigendum soon," an official with Ministry of Statistics and Programme Implementation (Mospi) told PTI.
Central Statistical Organisation (CSO) that releases the data is part of Mospi.
The wide difference in GDP growth numbers under the two methodologies created confusion among economists.
ADVERTISEMENT
Experts said GDP at market price should not have been so low, since indirect taxes--excise duty--rose by two per cent this fiscal, after the government partially withdrew stimulus measures.
The mistake was in calculating a price deflator, which is used for converting nominal GDP into real GDP, explained the official.
Real GDP does not include inflation and hence considered a better indicator of an economy. Also, when economic growth rate is defined, real GDP is used, rather than nominal GDP. PTI IJD RHP KM 09011557 NNNN
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
Related Articles
Parliamentary panel moots higher education spending, says NEP's 6% GDP target unmet2026-06-17T12:31:54Z- Goldman Sachs cuts India's 2026 CAD forecast to 1.3% of GDP2026-06-15T19:10:09Z
- CEA defends India's GDP data, says country does not use methodology changes to inflate growth numbers2026-06-14T11:55:42Z
Poll
ADVERTISEMENT
