GDP: Montek questions CSO's forecast

Questioning the methodology of CSO in computing economic growth projections, the Planning Commission on Thursday said it has ignored the rising growth trend while working out estimates for 2012-13.

"I am not certain that whether they (CSO) have done it in a correct way. In the past also, the quarterly (GDP) data was very frequently adjusted," Planning Commission Deputy Chairman Montek Singh Ahluwalia replied when asked about CSO's advance growth projections.

According to Central Statistical Organisation's (CSO) advance estimates of GDP growth for 2012-13, economic growth is estimated at 5 per cent as compared to 6.2 per cent last year.

The economy grew by the 5.4 per cent in the first half of this financial year (April-September).

Elaborating further, Ahluwalia said: "I get the impression that they (CSO) have not actually addressed the question ... could it be that the (decline in the) economy bottomed out, in that case straight forward linear projection would not be right."

"I think it (growth projection of 5 per cent in 2012-13) is very low. I have been told that CSO has taken data from April to November (2012-13) and they just projected it (advance estimates)," he added.

Explaining further that the GDP growth for 2010-11 was recently revised from 8.4 to 9.3 per cent, he hoped that it may happen to 2012-13 estimates also.

When asked even 5 per cent economic growth projection for 2012-13 is over-stated, he replied: "I don't think so. They underestimated 2010-11. When they raised that to 9.3 per cent, then 2011-12 figure fell to 6.2 per cent."

"I don't think that they even have full data for November (2012). They have some production data and some credit data. I don’t think that it is very reliable way of looking at the situation," he said.

About the rise in per capita income for 2012-13 to Rs 68,747 as compared to Rs 61,564 during 2011-12, he said, "The rise in per capita income is simply because earlier economic growth rates were higher (in 2010-11 and 2011-12).

On tweaking the annual average growth rate target for 12th Plan in view of these advance estimates, he said, "It (the growth in 2012-13) will certainly be below 6 per cent. I think nobody has doubt about. But I would not change the average annual growth rate target (of 8 per cent) in 12th Plan."