For Quick Alerts
For Daily Alerts

    GDP Revisions Raise More Questions than Answers: SBI Research

    By Religare

    The shift in GDP computation by the Central Statistics Office (CSO) raises more questions than the solutions which it offers, the economic research department of the country's largest lender SBI has said.

    "The recent statistical exercise by the CSO raises more questions than it has resolved," SBI's chief economic advisor and general manager of the Economic Research Department Soumya Kanti Ghosh said in a note.

    GDP Revisions Raise More Questions than Answers: SBI Research

    The handsome growth in manufacturing (6.2 per cent in 2012-13 as against 1.1 per cent under the previous computation) does not map the sales growth, the note said.

    Apart from that, he also finds problems with the CSO's classification of 'indirect taxes and subsidies' as production taxes and production subsidies.

    "These production taxes or subsidies are paid or received with relation to production and are independent of the volume of actual production. These may impart a bias to manufacturing growth," he said.

    Ghosh said the jump due to change in the way the GDP growth is computed, was at a low 2.2 percentage points in FY14 to 6.9 per cent, while in FY13, it rose to 60 bps to 5.5 per cent from 4.9 per cent, which is lower than the same observed when other countries have undergone revisions in the last 5-7 years.

    On the positive side, the note said, the exercise is beneficial as it enables policy makers and analysts to obtain a more accurate set of economic statistics that is a truer reflection of current realities for evidence-based decision-making.

    It also reveals a more accurate estimate of the size and structure of the economy by incorporating new economic activities which were not previously captured in the computational framework, he added.

    The Reserve Bank was largely ambivalent on the changes which have been brought about, saying it will look through the revised and new data releases, and will look forward to the set of numbers to be released on February 9 for more clarity.

    Read more about: gdp sbi economy
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    Get Latest News alerts from Goodreturns

    Notification Settings X
    Time Settings
    Clear Notification X
    Do you want to clear all the notifications from your inbox?
    Settings X
    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more