RBI Flags New GDP Growth Rate Methodology

28 January, Mumbai

RBI Governor Raghuram Rajan Thursday raised concern over the new GDP growth rate methodology and said there is a need for better computation of numbers so as to avoid overlaps and capture the net gains to the economy.

There are problems with the way we count GDP which is why we need to be careful sometimes just talking about growth, Rajan said at an event here.

“We have to be a little careful about how we count GDP because sometimes we get growth because of people moving into different areas he said in an obvious reference to the new GDP counting methodology.

A change in base year for computing national accounts had been changed which pushed up the economic growth rate for 2013-14 to 6.9 per cent. The earlier estimate of GDP growth for India for 2013-14 based on the basis of old series was 4.7 per cent.

These changes follow a revision in the base for calculating national accounts to 2011-12 from 2004-05.The base year was last revised in January 2010We do lose some, we gain some and what is the net, let us be careful about how we count that,” he said.