Economic Advisory Council defends India's economic growth
According to EAC-PM, it was on the basis of recommendations of several committees with that the government implemented the change from January, 2015.
"It is worth noting that the base year of India’s income calculations shifted to 2011-12 on the basis of recommendations of several committees with experts in National Income Accounting," EAC-PM said on Wednesday.
According to EAC-PM, it was on the basis of these recommendations, started in 2008, that the government implemented the change from January, 2015. "Therefore, it is wrong to suggest that the views of experts have not been taken into account while changing the Base Year or weights or switching from Annual Survey of Industries (ASI) to Ministry of Corporate Affairs (MCA) 21," it said
Commenting on cross country regression used by Subramanian in his paper, EAC-PM said using cross-country regressions to estimate GDP is a most unusual exercise, as is the suggestion that any country’s GDP that is off the regression line must be questioned.
"The proxy indicators that he used can also be questioned. Nor does this exercise allow for GDP increases on the basis of productivity gains," the council said.
According to the council, a country’s GDP is in nominal terms and any exercise should be on the basis of nominal figures, not real growth rates.
The Economic Advisory Council has said it will examine in detail the estimates made in Dr. Arvind Subramanian’s paper and come out with a point-to-point rebuttal in due course.
"At the moment, it is felt that any attempt to sensationalize what should be a proper academic debate is not desirable from the point of view of preserving the independence and quality of India’s statistical systems, all of which the former CEA is familiar with," it said.
"These are certainly issues that Dr. Subramanian must certainly have raised while he was working as CEA, though by his own admission, he has taken time to understand India’s growth numbers and is still unsure," the council added.