Is India’s 7% #GDP growth too good to be true?
In the Facebook Live session this morning, Rajesh Mahapatra and Suchetna Ray talk about the Q3 GDP growth estimate of 7% put out by Chief Statistical Office (CSO). The data has flummoxed economists and analysts, some of whom predicted the growth to be not more 6.4%. What is more surprising is the advanced estimate of 2016-17, which the CSO has put at 7.1%. This estimate is lower than last year’s estimate, but definitely higher than the prediction that analysts had made. CSO has based its estimate on increased consumption but what analysts find perplexing is how the output grew at such a rate despite the country facing one of its worst ever phases of cash crunch caused by the central government’s demonetisation move announced on November 8. And it is unclear whether the rise in internet transactions post November 8 have affected the GDP estimates. That data, according to Mahapatra and Ray, lacks credibility and should be scrutinised, with the possibility of revision of the estimates.