A day after the Central Statistical Office (CSO) projected that India’s economy is set to grow at an alarmingly low 5% in 2012-13 — the worst in 10 years — the finance ministry and the plan panel have contested the estimates. Both argue the economy will expand by 5.5% when the revised estimates come out later this year.
"It is likely that the advance estimates of 5% will be revised and the final estimate will be closer to the government's estimate of a growth rate of 5.5 % or slightly more," the finance ministry said in a statement on Friday.Planning Commission questioned the CSO methodology to reach the projection. "The CSO should focus on facts and not make projections. If they do, the forecasting model should be made explicit and not judgemental," plan panel deputy chairperson Montek Singh Ahluwalia told HT adding the government’s premier data collating organisation had revised its earlier GDP estimates on account of flaws.
Ahluwalia had constantly maintained that the economy this fiscal would grow at somewhere between 5.5 and 6 % and there were enough indications of it since November 2012.
What has perturbed Ahluwalia is that CSO has failed to consider the signs of economic revival since September when Sensex jumped as result of the government's slew of economic reforms. Abhijit Sen, a panel member and senior economist, felt that the CSO would upwardly revise the GDP estimate once it gets data for November onwards. “A small error in calculation can make a huge difference in estimate,” he said