‘Ex-CEA’s paper does not consider key indicators

6 min read
  1. According to former planning commission member,former Chief Economic Advisor(CEA) analysis of economic growth is incorrect.
  2. He said that the analysis ignores the indicators related to the bulk of economic activity such as those measuring the agriculture,services and informal sectors.
  3. Recently,former CEA had said that India’s GDP growth in the period 2011-12 to 2016-17 is likely to have been overestimated.He said that the growth during that period was actually 4.5% rather than the 7%.
  4. He said this because India had changed its data sources and methodology for estimating real gross domestic product(GDP) for the period since 2011-12.
  5. The problems with the new methodology was that the growth numbers no longer correlated with other indicators of economic growth such as (a)electricity consumption (b)two-wheeler sales (c)airline passenger traffic (d)index of industrial production and (e)export figures.
  6. However,the former planning commission member questioned the former CEA and has said that the indicators used by former CEA had nothing to do with agriculture, services or informal sectors.
  7. He went on to explain that the trends for each of the three major sectors which are agriculture, manufacturing and services show that the growth dropped off about seven years ago and that there is no indication of an overestimation in any of the sectoral growth numbers.

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