Double deflation debate over GDP methodology no ‘great battle’: Niti Ayog Vice Chairman
Niti Aayog Vice Chairman Ashok Kumar Lahiri dismissed the ongoing debate regarding the use of double deflation in India's new GDP series, asserting that the methodology is neither impractical nor difficult to implement. He questioned why concerns were only surfacing now, particularly as the new series, based on 2023-24 prices, indicates lower GDP growth rates compared to the previous 2011-12 base year series. His comments follow criticism from former Finance Secretary S.C. Garg and former Chief Statistician Pronab Sen about the methodology and data availability.
Why it matters
The methodology used to calculate GDP significantly impacts economic policy decisions, public perception of economic health, and international comparisons. A debate over its accuracy and implementation can affect confidence in official economic statistics and influence future policy directions.
There is no winner in the ongoing “battle” of views on the use of double deflation in India’s new GDP series, Ashok Kumar Lahiri, Vice Chairman of Niti Aayog, the government’s economic think tank, said on Tuesday, arguing that the methodology is neither impractical nor particularly difficult to implement.
Deflating the price effects at the producer and consumer expenditure of GDP (gross domestic product) “is not a great battle,” Lahiri said on the sidelines of a fintech event in Mumbai.
“For double deflation, all that you need to do is separate the inputs from the outputs. That’s not a great battle. So I don’t think double deflation methodologically is an impossibility. Can it be improved? Of course, everything can be improved. It’s a good time to start,” he said.
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