World Bank Vouches for Dependability of India’s GDP Numbers

Anyone familiar with quantifying gross domestic product (GDP) knows that at times it is more an art than a science. This is often particularly true in developing nations, where limited access to sophisticated technologies and practices make reporting difficult and the chances of “rigging” quite prominent.

However, the World Bank’s Senior Vice President and Chief Economist, Kaushik Basu, has come to the defense of India in particular, saying that their self-reported GDP estimates are beyond reproach.

Anyone familiar with quantifying gross domestic product (GDP) knows that at times it is more an art than a science. This is often particularly true in developing nations, where limited access to sophisticated technologies and practices make reporting difficult and the chances of “rigging” quite prominent.

However, the World Bank’s Senior Vice President and Chief Economist, Kaushik Basu, has come to the defense of India in particular, saying that their self-reported GDP estimates are beyond reproach.

According to a report by DNA India, Basu, while responding to questions about India’s recently released GDP numbers on Saturday, made the highly laudatory comments about the work done by India’s Central Statistics Office (CSO). According to Basu, the CSO’s report on Indian GDP was very dependable and there was no possibility of tampering with the results to make the nation’s performance look better.

“Actually, India’s Gross Domestic Product numbers are very dependable …You know, there are countries where it is possible to rig these numbers. First, that does not happen in India. The system is very open. I have seen this during my time … Even now; there are lots of people involved. There is no one at the top who can say that change this number or change that number. So that kind of rigging is not taking place … Given the transparency, you have reason to have enough confidence in the growth figures,” he said.

Basu, noted a small decline in the government’s fiscal deficit target, but suggested that it would be of little concern to the World Bank given the current economic climate. According to the CSO’s report, India should experience a GDP growth rate of 7.6 percent in 2016; the highest rate of growth the nation has experienced in five years.

Some analysts expressed doubt as to the veracity of the CSO’s numbers. They suggested that the Indian government might be tampering with its own performance reports to convey the appearance of a more stable and growing economy than truly exists in order to lure foreign investors and appease the Indian people. Others attribute the higher figures to a change in calculation methodology for national income.

Basu dismissed these concerns, throwing full support behind the Indian government. “My view on Indian GDP is, given the difficulties of measurement in developing countries, [in India it is] actually being done very well.