Topic – Indian Economy and issues related to growth
5) The GDP back series calculations raises a lot of unanswered questions over how the economy has been faring since 2011. Examine and comment on the current state of Indian economy.(250 words)
Why this question
The GDP back series calculations have been presenting varying pictures over the status of Indian economy in the last decade or so. There is a need to understand the data in depth to have a better understanding of how the economy has been faring and the issues that it is faced with.
Key demand of the question
The question expects us to explain the GDP back-series data up to 2004-05 based on 2011-12 base year and discuss what it tells about the economy since 2011 and comment on the current state of the question economy.
Examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any .
Structure of the answer
Introduction – Highlight that the central statistics office has presented new GDP growth data under the new base series which has presented conflicting pictures and highlighted several issues involved therein.
Body – Highlight that the new calculation has revised GDP growth data based on calculations. However bring out that other economic metric are not in consonance with the other indicators of economic growth such as increase in capital formation, savings rate etc. Discuss what is meant by revising the growth figures and what actually are the takeaway from the entire exercise by CSO. Highlight that the economy has still failed to recover fully – bad debt, capital formation etc are huge issues that need tackling for economy to grow.
Conclusion – Discuss the relevance of the GDP back series calculations and bring out the current state of economy.