A day after the October-December quarter gross domestic product (GDP) growth estimates came in lower than market expectations, Chief Economic Advisor V Anantha Nageswaran said that the figures came across as tepid only due to revisions made in earlier years, and had to be analysed in that context.

Nageswaran said to reporters that there was much misunderstanding of the data released on Tuesday evening by the National Statistical Office because it also came with revisions to the data of the previous three years.

‘Let us take Private Final Consumption Expenditure (PFCE) at constant prices. The data revision to the prior years has made a six per cent growth rate come down to two percent in Q3FY23,” Nageswaran said.

Nageswaran further told reporters that even though one is comparing consumption to consumption, what is being compared is the cumulative base effect of the first revision of 2021-22, the second revision of 2020-21 and the third revision of 2019-20, all of which inflate the base period data and depress the growth rate for 2022-23.

Nageswaran also gave the example of Manufacturing Gross Value Added and said it would have grown by 5.1 per cent year-on-year in the full year FY23, based on the second advanced estimates without revised data. “However, it will grow by 0.6 per cent YoY in this period after revision. That is a revision of 4.5 percentage points.”

For Q3FY23 Nageswaran said that Manufacturing GVA would have grown by 3.8 per cent YoY without revised data. However, it contracted by 1.1 per cent due to the revisions, which was a change of 4.9 percentage points.

“When one is comparing a data point that has gone through three or four revisions and another which is still called ‘advanced estimate’, one is not comparing apples to apples but apples to oranges,” he said.

“The argument that the recovery has become shallower does not make sense since one is not making a fair comparison,” he added.

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