Business · India Bureau
SBI Economist Warns Against Misleading GDP Growth Comparisons
State Bank of India's chief economist has cautioned against using outdated data series for GDP growth calculations, highlighting the importance of accurate baseline comparisons. The warning comes as analysts debate the true pace of India's economic expansion.
LSN India ·
Soumya Kanti Ghosh, Group Chief Economic Adviser at the State Bank of India, has flagged potentially misleading claims about India's GDP growth figures that rely on comparisons with older data series. Ghosh emphasized that accurate assessment of economic performance requires proper alignment of figures across consistent methodologies.
According to the economist's analysis, the correct approach to measure GDP growth would involve comparing the latest quarter's gross domestic product of Rs 88.3 lakh crore against the revised figure of Rs 80.4 lakh crore from the corresponding quarter in the previous year. This ensures that both figures are calculated using the same base year and methodology, allowing for meaningful year-on-year comparisons.
The distinction between using old and revised series can significantly impact perceptions of economic growth rates. Ghosh's intervention underscores the critical importance of methodological consistency when evaluating macroeconomic trends, particularly given the Reserve Bank of India's base year revisions that have periodically updated GDP calculation frameworks.
Economists and policymakers routinely rely on GDP growth figures to assess the health of the Indian economy and inform decisions on monetary and fiscal policy. Ghosh's clarification serves as a reminder that stakeholders must exercise caution when comparing growth statistics and verify that underlying data sources follow standardized calculation methods.