After scaling down India’s outlook for fiscal years 2019-20 and 2020-21 by 20 basis points, the International Monetary Fund (IMF) has now raised doubts over the veracity of India’s GDP numbers and called for greater transparency in its statistics.
IMF chief economist Gita Gopinath said she felt there were some issues with the way India calculates its growth rate and the IMF was paying close attention to the new numbers, CNBC TV 18 reports.
This is a setback for the Indian government as earlier when doubts were being raised regarding the country’s growth figures, senior officials argued that the government’s GDP figures had been accepted by global organizations such as the World Bank and the IMF.
While Gopinath welcomed the changes made to India’s calculation of gross domestic product in 2015, including the change in the base year, she flagged concerns over the “deflator” used to calculate the real GDP.
A GDP deflator is a measure of inflation. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that of prices that prevailed during the base year. It helps to capture the extent of increase in the GDP due to higher prices rather than an increase in output.
Gopinath urged the Indian authorities to communicate statistics more transparently, given the country’s significance in the global landscape.
Former RBI governor Rajan too had expressed doubts over India’s growth rate and called for setting up an impartial body to review the GDP numbers to restore their credibility.