This time, too, there seems to be some distortion in growth numbers, but for a different reason. These repayments likely resulted in bloated subsidy growth, thereby depressing third-quarter and fourth-quarter growth estimates. The underestimation in 2020-21 GDP growth could inflate 2021-22 numbers because of a low statistical base. We calculate that GDP growth may be overestimated by half a percentage point in 2022-23. But with GDP impacted by the payment of previous-year subsidy dues, we think GVA will better reflect economic growth in 2020-21, 2021-22 and 2022-23, or until whenever these puzzling GDP numbers abound.

Source: Mint March 07, 2021 17:03 UTC