Amid the ongoing crisis in West Asia, the Indian economy is expected to take a hit: the World Bank’s latest projections suggest that the country’s GDP growth could fall to 6.6 percent in this financial year.
The government’s own projections, released earlier this year, tell a more upbeat story though – GDP growth of 7.6 percent in the current financial year, after recent updates were made in the way India measures economic growth. The update itself was the result of a revision of the base year for computation of the GDP from 2011-12 to 2022-23, done by the Ministry of Statistics and Program Implementation.
A revision such as this is usually conducted once in every five years, where a “normal” year (without any major shocks or unusual activities) is chosen as the new base year. For India, disruptions in economic activity from the rollout of the GST (Goods and Services Tax) in 2017 and COVID-19 delayed this revision.
The previous GDP series of 2015, where the base year was revised to 2011-12, was an update fraught with controversies. In 2018, this debate intensified: the bone of contention was the new methodology, new datasets, and the revised figure of 8.6 percent growth in 2018 (instead of 8.3 percent).
