Amid questions around data quality and claims by former CEA Arvind Subramanian that India's GDP may be overestimated, the Economic Survey 2020 has said that concerns of inflated growth rate are unfounded.
"The models that incorrectly over-estimate GDP growth by 2.7 per cent for India post-2011 also mis-estimate GDP growth over the same time period for 51 other countries out of 95 countries in the sample," the Survey said.
"Several advanced economies such as the UK, Germany and Singapore turn out to have their GDPs misestimated when the econometric model is incompletely specified," it noted.
The Survey said that concerns of a misestimated Indian GDP are unsubstantiated by the data and are thus unfounded.
Triggering controversy on the accuracy of GDP figures, former Chief Economic Advisor Arvind Subramanian had in June last year wrote in a paper that India's economic growth was overestimated by 2.5 per cent per year between FY12 and FY17.
This was the result of change in methodology for calculating GDP, the economist had said.
"Official estimates place annual average GDP growth between 2011-12 and 2016-17 at about 7 per cent. We estimate that actual growth may have been about 4.5 per cent with a 95 per cent confidence interval of 3.5 to 5.5 per cent," Subramanian had said.
Subramanian had quit from the post of CEA before completing his term.
The Economic Survey authored by his successor Krishnamurthy Subramanian said that cross-country comparisons are fraught with risks of incorrect inference due to various confounding factors that stem from such inherent differences.
"As a result, cross-country analysis has to be carefully undertaken so that correlation is distinguished from causality," the Survey said.
It noted that the base year of the GDP Series was revised from 2004-05 to 2011-12 and released on January 30, 2015 after the adaptation of sources and methods in line with the System of National Accounts (SNA) 2008 of the United Nations.