Ahead of the release of the fourth quarter GDP numbers, India’s former chief statistician Pronab Sen has said that with the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP) to 2011-12 from 2004-05, the country’s gross domestic product (GDP) for fiscal year 2016-17 will get a 40-50 basis points (bps) push to 7.6 percent against the Central Statistics Office (CSO) prediction of 7.1 percent.
Sen, who is currently the country director at the International Growth Centre, said that since WPI is used for converting the current price series of GDP to constant price, the growth rate is going to step up further. There is a chance that GDP may get revised upwards on the basis of IIP also, as it is used to calculate the non-corporate sector GDP. So, there will be some effect there as well. He also said that the problem lies in the fact that the maximum brunt of demonetisation was felt by the unorganised sector and there is no assessment available on it.
He noted that the government should come out with the revised GDP figures for all the years post 2011-12 as the change in base year of the key macroeconomic indicators will push up all the growth figures of the country. He also pointed out that the revision in the base year of the key macroeconomic indicators was ‘unusually delayed this time’ and should have been done by the end of 2015-16. Despite the push on account of revision of base year, he said that it was unlikely that India will see an eight percent growth in the current fiscal as it lacked a sustainable export growth and the global economy was still not performing well.
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