New Delhi, Feb. 9: In the run- up to the general elections, the BJP-led government today announced a higher-than-expected GDP growth forecast of 8.1 per cent, after a slight sleight of hand with national statistics.
While most economic pundits had forecast a 7 per cent plus GDP growth for 2003-04, the Central Statistical Organisation (CSO) today predicted a scorching 8.1 per cent, after bringing down earlier estimates for 2002-03 just 10 days back from 4.3 per cent to 4 per cent.
Finance ministry officials admitted the downward revision meant a lower base that saw GDP projections “for this fiscal going up”. The statistical jugglery came weeks after a controversy was kicked off over the BJP-led government’s advertisement campaigns that spoke of fulfilling the Prime Minister’s “dream” of an 8 per cent GDP growth.
CSO had revised 2002-03 farm growth shrinkage at 5.2 per cent against earlier estimates of 3.1 per cent on the back of a severe drought.
This fresh estimate for 2002-03, announced on January 30, saw this year’s bumper crop fuelling a 9.1 per cent growth in the farm sector. With two-thirds of India’s one billion-plus population dependent on agriculture for their livelihood, farming accounts for a quarter of the country’s GDP as also consumer demand.
“The new calculations mean a huge increase in GDP growth forecasts for the year. We believe it means an increase of about 0.7 per cent in growth forecasts,” an official said.
Interestingly, the World Bank had some time back calculated the Indian subcontinent’s GDP growth estimates at 5.3 per cent for calendar year 2003.
North Block officially defended the GDP projections with finance secretary D. C. Gupta pointing out, “What is significant is that the 8.1 per cent growth projection is not only because of good agricultural growth on the back of a good monsoon but also marked improvement in the manufacturing and services sectors.”
North Block said the bumper crop this fiscal has seen better rural incomes which led to a 7.1 per cent growth in industrial demand in 2003-04 compared with 6.2 per cent in the year before. The services sector, which has been the best performer in the last few years and has a huge weightage of 50 per cent in GDP calculations, is projected to grow 8.44 per cent this fiscal compared with 7.14 per cent in 2002-03.