An analysis of revisions in Indian GDP data

Sapre, Amey and Sengupta, Rajeswari (2017): An analysis of revisions in Indian GDP data. Published in: World Economics , Vol. 18, No. 4 (20 December 2017)

Abstract

In this paper we study revisions in the annual estimates of India’s GDP data. The objective of our analysis is to understand the revision policy adopted by the Central Statistical Organisation (CSO) and the issues therein. Using historic data, we study the magnitude and quality of revisions in the aggregate as well as the sectoral GDP series. We analyse the computation of the sectoral revised estimates and compare the extent of revision in growth rates from the first release to the final estimate. To understand the magnitude of revisions, we compute the standard deviation of revisions in growth rates for each sector and use that to build confidence bands around the initial estimates. The confidence bands provide a means to understand the extent of variation in the final growth rate estimate, and at the same time, provide a mechanism to contain revisions. Based on our analysis, we highlight some of the major issues in CSO’s revision policy. We outline possible solutions that can be implemented to improve the quality of GDP data revisions. We identify sectors with large variations in growth rates and argue that improving or changing the low quality indicators can help contain growth rate revisions and enhance the credibility of the estimates.

• Item Type: MPRA Paper
• Language: English
• Keywords: GDP, National Accounts, Revisions, India
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; E - Macroeconomics and Monetary Economics > E0 - General > E00 - General; E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts

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