New Delhi, Feb 27: After two consecutive quarters of contraction, India’s Gross Domestic Product (GDP) grew by 0.4 per cent in December quarter of the current fiscal (Q3 FY21).
After recording worst-ever contraction of 24.4 per cent in Q1 FY21 (April-June), followed by 7.3 per cent fall in Q2 (July-September), India’s Q3 performance is now eliciting different responses from experts.
BJP leader and Rajya Sabha MP Subramanian Swamy said that India’s Q3 GDP growth would have been -10 per cent using Laspeyres Price Index Number and -15 per cent using Paasche Index, provided guesstimate of negative growth in MSMEs and informal sector were added to GDP.
“If guesstimate of negative growth in MSMEs and informal sector is added to GDP, the GDP growth rate using Laspeyres Price Index Number will be -10 per cent and not +0.4 per cent. Using Paasche’ Index it will be -15 per cent. Since media has semi literates in economics, this may sound Greek and Latin,” Subramanian Swamy said in a tweet on Saturday.
The Laspeyres Price Index is a price index used to measure the economy’s general price level and cost of living, and to calculate inflation. The index commonly uses a base year figure of 100, with periods of higher price levels shown by an index greater than 100 and periods of lower price levels by indexes lower than 100.
The Laspeyres Price Index is a price index used to measure the economy’s general price level and cost of living, and to calculate inflation. The index commonly uses a base year figure of 100, with periods of higher price levels shown by an index greater than 100 and periods of lower price levels by indexes lower than 100.
As per government data released on Friday, India’s GDP grew 0.4 per cent in the third quarter of this fiscal, driven primarily by investment and government expenditure, as private expenditure lagged behind. The government also revised the GDP contraction in first quarter to 24.4 per cent from 23.9 per cent earlier, while the contraction for second quarter was revised to 7.3 per cent as opposed to 7.5 per cent estimated earlier. It expects GDP to contract by 8 per cent in financial year 2020-21.
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