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A day after October-December quarter gross domestic product (GDP) growth estimates came in lower than market expectations, Chief Economic Advisor (CEA) V Anantha Nageswaran has said the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ because of higher base. According to Nageswaran, the GDP growth base was inflated due to data revision for the past three years.

The National Statistical Office (NSO) has revised GDP growth data for the past three years - 2019-20, 2020-21 and 2021-22 and also released the second advance estimates of GDP for 2022-23. While the growth rate for 2021-22 has been revised up by 40 basis points to 9.1 per cent, from 8.7 per cent, the GDP for 2020-21 (Covid impacted year) too has been revised upwards to (-) 5.8 per cent, from (-) 6.6 per cent. For 2019-20 also, the growth has been revised upwards to 3.9 per cent, from 3.7 per cent. However, the second advance estimates for 2022-23 real GDP growth was retained at 7 per cent - as was projected in first advance estimates in January.

The data showed that the manufacturing sector contracted by 1.1 per cent in the October-December quarter, and private consumption expenditure slowed to 2.1 per cent. According to him, but for the revision in data, which resulted in a higher base, the manufacturing sector would have shown an increase of 3.8 per cent year-on-year and private consumption expenditure would have grown 6 per cent in the October-December quarter. He said ‘so, really one is comparing apples to oranges. When one set of data is revised to take into account underlying data revisions, larger samples, etc., and the other is not, it is not a like-for-like comparison’.

With regard to manufacturing gross value added (GVA), he said it would have grown by 5.1 per cent in 2022-23 fiscal based on Second Advance Estimates without revised data. However, it will grow by 0.6 per cent in 2022-23 after revision. That is a revision of 4.5 percentage points. Similarly, manufacturing GVA would have grown by 3.8 per cent YoY in Q3 FY23 without revised data. However, he said it has contracted by 1.1 per cent YoY in Q3 FY23 after this revision. That is a change of 4.9 percentage points.