2015 India GDP rebasing

Recalculation of gross domestic product In 2015, the Central Statistics Office (an office under the Ministry of Statistics and Programme Implementation) of the Government of India made a number of changes to the way it calculated the gross domestic product of India, including a change in the base year relative to which calculations are done. This change was known as the 2015 India GDP rebasing or just the rebasing. https://www.wsj.com/articles/india-changes-gdp-calculation-method-1422622762 India Changes GDP Calculation Method. Statistics Ministry Changing Base Year for Benchmark, Switches to Market-Price Calculation January 30, 2015 Zhong Raymond Kala Anant Vijay October 15, 2017 Wall Street Journal https://www.forbes.com/sites/timworstall/2015/04/18/indias-change-in-gdp-calculation-method-seems-highly-sensible/#501f4847e235 India's Change In GDP Calculation Method Seems Highly Sensible Worstall Tim April 18, 2015 October 15, 2017 Forbes https://manasiecon.wordpress.com/2015/05/14/the-new-contagious-crisis-called-gdp-revision/ The New Contagious Crisis called GDP Revision! May 14, 2015 October 16, 2017 https://seekingalpha.com/article/2874336-re-basing-ups-indias-gdp-growth-rate-in-2013minus-14-from-5-percent-to-6_9-percent Re-Basing Ups India's GDP Growth Rate In 2013-14 From 5% To 6.9% Seeking Alpha February 2, 2015 November 17, 2017http://blog.frontierstrategygroup.com/2015/10/indias-new-gdp-series-and-why-it-matters/ India's new GDP series and why it matters Emerging Markets Insights Pratima Singh October 12, 2015 October 21, 2017https://www.forbes.com/sites/kenrapoza/2015/02/17/whats-behind-indias-magical-gdp-numbers/#66abb7392c64 What's Behind India's Magical GDP Numbers? October 21, 2017 https://archive.today/20171021222059/http://www.forbes.com/sites/kenrapoza/2015/02/17/whats-behind-indias-magical-gdp-numbers/#66abb7392c64 Kenneth Rapoza Forbes 2017-10-21 dead https://www.ceicdata.com/en/blog/early-evaluation-indias-gdp-rebasing An Early Evaluation of India's GDP Rebasing CEICdata February 17, 2015 October 21, 2017https://ftalphaville.ft.com/2015/02/03/2108792/india-gdp-growth-rate-up-confidence-in-statistics-down/ India: GDP growth rate up, confidence in statistics down? David Keohane February 3, 2015 Financial Times October 21, 2017 Timeline The new method was used to release updated numbers for Fiscal Year 2013 (April 2013 to March 2014) and 2014 (April 2014 to March 2015). Initial announcements about the change were made in February 2015, and additional series were released in 2015; much of the commentary on the changes happened in April 2015. http://www.businesstoday.in/current/economy-politics/statisticians-face-queries-on-gdp-calculation/story/218261.html Statisticians face queries on GDP calculation Singh Rajesh Kumar April 17, 2015 November 18, 2017 Business Today Changes made There were two main changes made to bring Indian GDP calculations more in line with international standards as enshrined in the System of National Accounts: change of the base year to 2011/12, and switch to market prices. A number of other minor changes were made, such as better data sources, and new classification and calculation methods. Change of base year Since January 2010, the base year used by statisticians in India's Central Statistics Office was the months endinyear for calculations to the year ending March 2012 (i.e., the 2011/12 year). According to the Frontier Strategy Group, India changes the base year for its GDP calculation about once every five years, so this change was in keeping with past changes. Change to using market prices The change also switched GDP calculation to using market prices rather than factor costs. to take into account gross value addition in goods and services as well as indirect taxes and subsidies (adding taxes and reducing subsidies). http://in.reuters.com/article/india-economy-gdp/methodology-change-sees-indian-economy-grow-faster-than-chinas-idINKBN0LD1AI20150209 https://web.archive.org/web/20171119055105/https://in.reuters.com/article/india-economy-gdp/methodology-change-sees-indian-economy-grow-faster-than-chinas-idINKBN0LD1AI20150209 dead November 19, 2017 Methodology change sees Indian economy grow faster than China's Singh Rajesh Kumar Kumar Manoj February 9, 2015 November 15, 2017 Reuters The change was claimed by the government to be more in line with global practices, and specifically in line with the recommendations of the System of National Accounts (SNA) 2008. Commentators generally agreed; Tim Worstall of Forbes called the previous system of factor costs a relic of the state-driven, manufacturing-focused approach to the economy of the Nehruvian Fabian socialist era. Incorporation of more and better survey data The government of India identified three new categories of data sources that were now being used in GDP calculation to make it more reliable: Corporate sector surveys: Data was used from MCA21, the new initiative of the Ministry of Corporate Affairs. Coverage of the financial sector was also increased. Improved coverage of activities of local bodies, both rural and urban, for better coverage of government activity Results of the National Sample Surveys conducted by the Ministry of Statistics and Programme Implementation, specifically the Unincorporated Enterprise Survey (2010–11) and Employment-Unemployment Survey (2011–12). Other changes A problem common to the old and new series was a lack of annual surveys, particularly to cover changes in the informal sector. The old method used a Labor Input (LI) method, which uses a benchmark-indicator process and then calculates output as the estimated labor input times the value added per worker. The new method used the Effective Labor Input (ELI) method, that distinguishes workers by productivity by assigning weights to different categories of workers. Industrial activities were now classified according to the National Industrial Classification (NIC) 2008. Effect on data series and reception of the change Composition of GDP Under NAS 2011-2012, the services sector constitutes a smaller proportion of overall GDP at 50.91% as of the fiscal year that ended March 2014 compared to 57.03% under the previous system. Under the new calculation method, industry became 31% compared to the old 25%, whereas services became 51% compared to the old 57%. Within industry, all three components, mining, manufacturing, and construction, were raised. This contrasted significantly with the results of past GDP rebasings, such as the 2010 Ghana GDP rebasing, https://www.washingtonpost.com/news/wonk/wp/2012/11/24/think-u-s-gdp-numbers-are-unreliable-check-out-ghanas/ Think U.S. GDP numbers are unreliable? Check out Ghana. Plumer Brad November 24, 2012 October 16, 2017 Washington Post https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/ASJ15%20Section1%20Eng.pdf Revising GDP estimates in Sub-Saharan Africa: Lessons from Ghana Jerven Morten Duncan Magnus Ebo The African Statistical Journal 15 August 1, 2012 October 16, 2017 https://www.theguardian.com/business/2012/nov/20/economics-ghana Lies, damn lies and GDP. Or, how Ghana went from being one of the poorest countries in the world one day to an aspiring middle-income one the next Jerven Morten November 20, 2012 October 16, 2017 and the 2014 Nigeria GDP rebasing and similar rebasings in Kenya, Uganda, Tanzania, and Zambia. https://www.ft.com/content/70b594fe-bd94-11e3-a5ba-00144feabdc0?mhq5j=e7 Nigeria almost doubles GDP in recalculation April 7, 2014 October 17, 2017 Blas Javier Wallis William Financial Times https://www.economist.com/news/finance-and-economics/21600734-revised-figures-show-nigeria-africas-largest-economy-step-change Step change. Revised figures show that Nigeria is Africa’s largest economy The Economist April 12, 2014 October 17, 2017 https://www.brookings.edu/blog/africa-in-focus/2015/03/03/are-african-countries-rebasing-gdp-in-2014-finding-evidence-of-structural-transformation/ Are African countries rebasing GDP in 2014 finding evidence of structural transformation? Sy Amadou March 3, 2015 October 17, 2017 Brookings Institution FY14 growth rate was revised upward significantly, from 5% to 6.9% and the FY13 growth rate from 4.7% to 5.1%. Some critics of the new method also noted that the downward revision of nominal GDP adversely affected various economic risk ratios. The growth rate of GDP GDP growth rates under the new series appeared to be higher than they had been under the old series; however, per the preceding section, this increase was achieved because the estimate of GDP level for previous years was lower in the new series than the old. The GDP being low with old method is just representation of how it was . The new method is better and is of international standards. Initially, there was a lack of data points released with both the old and new methods for a meaningful comparison (specifically, the new series was not extended back in time so that its differences with the old series could be better understood). A number of people were critical of CSO for not providing this data. The increase was considered suspicious by commentators who noted that other indicators (such as tax revenues) seemed to show a slowdown in economic growth, suggesting that either the role of the informal, untaxed sector was increasing fast, or some of the data was wrong. See also 2010 Ghana GDP rebasing 2014 Nigeria GDP rebasing References 30em Category:2015 in Indian economy