Economy grew 10.08% in FY07, going by new series

NEW DELHI: Achieving a doubledigit growth rate has been a longcherished goal for the Indian economy. If the current Gross Domestic Product (GDP) series, which has 2011-12 as its base year, were to be extended backwards, the Indian economy may have actually achieved this feat in 2006-07, with annual growth of Gross Value Added (GVA) at factor cost reaching 10.08%.

To be sure, these figures are not from the Central Statistical Office (CSO), the official source of GDP statistics in India. There is still no official back-series of the 2011-12 GDP numbers and no line of sight on when they will be released. But these numbers are credible because they are from the report of the Committee on Real Sector Statistics , which was chaired by Sudipto Mundle, emeritus professor at t he National Institute of Public Finance and Policy.

The report was submitted to the National Statistical Commission last month. While the report deals with a larger gamut of issues, one of its chapters is devoted to linking the old and new GDP series. This work has been done by a sub-committee chaired N R Bhanumurthy, a professor at National Institute of Public Finance and Policy.

The report gives identical values for growth in GVA and GDP at factor cost in the backdated new series. It also shows that backdated new series GDP at market prices crossed the 10% level twice: hitting 10.23% in 2007-08 and 10.78% in 2010-11. While the 2011-12 series does not

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give values for GDP at factor cost, focusing on GVA (or GDP at factor cost figures) in backdated new series is a better option, as the GDP at market price values do not give sector-wise growth data.

To be sure, 2006-07 was not the first time India achieved a double digit growth rate. GDP at factor cost grew at 10.16% in 1988-89, largely because of a strong baseeffect as the previous year’s growth rate was just 3.53%.

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