The confused rate of expansion
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What has been the economic performance of the four states and the Union territory of Puducherry that will be holding assembly elections soon?
Well, it depends on whether you are looking at the old series (base 2004-05) for state domestic product growth or the new (base 2011-12) data.
The accompanying chart shows the growth in state domestic product at constant prices in terms of both the old and the new series for the bigger states and Puducherry.
The differences are striking.
Take a look at Assam. Growth under the old series was 5.15% for 2012-13, 7.5% for 2013-14 and 6.41% for 2014-15.
Chief minister Tarun Gogoi could say it was a decent show, better than the all-India average. But that rosy picture gets thrown out of the window by the new series. This shows Assam’s growth at a pathetic -0.07% for 2012-13, 6.08% for 2013-14 and a depressing 3.34% in 2014-15. The opposition would do well to tom-tom the new growth figures, while avoiding the old ones.
What about Kerala? Under the old series, growth in Kerala picked up from 5.92% in 2012-13 to 6.27% in 2013-14. But under the new series growth decelerated, falling from 6.5% in 2012-13 to 4.54% in 2013-14. Of course, it perked up again in 2014-15; so, perhaps, the Congress can claim that all is not lost.
But the new series growth figures for Tamil Nadu, another of the poll-bound states, have an unambiguous message—without exception, they are better than the numbers for the old series. Indeed, in 2013-14, Tamil Nadu was the all-India star, with the highest growth among the major states. Its growth in 2014-15, too, is far above the all-India average. If the numbers are right and if economics is all that mattered to voters, then J. Jayalalithaa has a cakewalk ahead of her.
Puducherry’s figures are the strangest of the lot. In 2012-13, its growth according to the old series was a very impressive 11.98%. The new series revised it down rather brutally to 2.93%. It got the same treatment the next year with growth according to the old series at 10.69%, coming down to a mere 4.96% in the new series. And then, as if to make amends, growth zoomed to 10.4% in 2014-15, although it was still a bit below that notched up under the old set of data.
Finally, we have West Bengal, which has cannily not brought out its GDP numbers under the new series. In the old series, growth was comfortably above the all-India average.
Some of the changes are rather strange. For instance, Bihar’s growth in 2012-13 slows from 10.69% under the old series to 3.5% under the new series. In 2014-15, however, growth accelerates from 9.45% to 15.56%.
Other major changes include Gujarat’s growth going up from 6.15% to 10.84% in 2012-13, Madhya Pradesh’s dropping from 9.48% to 2.32% in 2013-14, Andhra Pradesh’s plummeting from 4.05% to 0.1% in 2012-13 and Telangana going up from 5.33% to 8.82% in 2014-15. In the state of Goa (not included in the chart), growth in 2012-13 was 4.17% under the old series, which plunged to -6.49% in the new series. Similarly, its growth of 7.71% in 2013-14 tumbled to 1.28% under the new series.
It’s not only the difference between the growth numbers that’s surprising. Even the trends shown by the two series seem to be different. For instance, in Jharkhand, growth accelerated in 2013-14 and then fell a bit in 2014-15 under the old series. But the new numbers show growth falling in 2013-14 and then going up sharply in 2014-15. There are several such examples.
Perhaps a detailed reconciliation of the two sets of numbers would add to the credibility of the data.
Manas Chakravarty looks at trends and issues in the financial markets. Comments are welcome at email@example.com