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“The truth behind India’s new GDP numbers”

Pramit Bhattacharya writes, in the Hindustan Times:

The truth behind India’s new GDP numbers

It is an open secret that India’s new gross domestic product (GDP) series has flummoxed most observers of the Indian economy. The new numbers seem completely out of sync with other economic indicators…

As an analysis of 189 nations over 33 years by the Reuters columnist Andy Mukherjee showed, never has an economy had such an handsome improvement in growth even while recording a big improvement in external balances as India claimed to have had in fiscal 2014.

Finally, given the surprising growth numbers, many global investors have begun comparing the state of official statistics in India to that of China. It is important to correct that perception.

In 2014, the Italian government’s National Institute of Statistics was awarded the Ig Nobel prize in economics, for “proudly taking the lead in fulfilling the European Union mandate for each country to increase the official size of its national economy by including revenues from prostitution, illegal drug sales, smuggling, and all other unlawful financial transactions between willing participants.”

The CSO [Central Statistical Office] needs to act fast to restore credibility of official statistics unless it wants to win the Ig Nobel prize for 2015.

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