The GDP growth rate of Indian economy for 2011-12 will be revised from 6.2 to about 7 percent. This was done to correct a miscalculation due to faulty data produced earlier. Earlier data underestimated industrial output by about 7 percentage points.
The underestimation of GDP growth rate by 7 percentage points was on account of underestimation of real factory output growth by Index of Industrial Production (IIP) data. The IIP data had significantly underestimated real factory output growth for 2011-12 at 2.9 percent.
However, on the basis of more reliable data for industrial output produced by Annual Survey of Industries (ASI), the industrial output in 2011-12 had grown by 23.6 percent in nominal and about 15 to 16 percent in real terms.
ASI data is considered more comprehensive and accurate than IIP data. It comes with a lag of 20 months. In the interim, the government estimates industrial production using IIP data.
The IIP has been consistently underestimating India’s industrial output but the magnitude of the problem has increased since 2005-06. The accumulation of errors over the years has led to wider variations between the IIP and the ASI data in the last couple of years.
GDP data for a fiscal year undergoes three rounds of revisions; the process takes three years. The Central Statistical Office’s (CSO) will be releasing the Second Revised Estimate for 2011-12 on 30 January 2014. The First Revised Estimate for 2011-12 was 6.2 per cent.
As per the Quick Estimates, Indian economy will grow at a decade-low growth rate of 5 percent in 2012-13.
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