India Economy Thread

[r3alist]

What about the changes in methodology, the use of benchmarks and the choice of benchmarks, and the lack of refreshing data

It's not just the base year, that sounds like an easy thing to do for a big win, so strange not to do it

By the way, the concerns flagged by the speakers are very defensible prudent and sensible, I would not say anti-national but that's not for me to say

There is an inherent difficulty in capturing the informal sector, that should be acknowledged for any large third world nation, however benchmarking or adjusting the informal sector to formal sector assumptions is clearly an exaggeration and a skew, especially especially without a data refresh. It's potentially compounding bad estimate on bad estimate. It is not with good conscious or good practice something you could say is professionally correct


The adjustment may not be that bad with A more suitable overall methodology, you still would have a healthy growth rate

Issue here is the excessive, you could say hysterical politicization of the GDP, as clearly India needs to attract investment, they really really need Investments to match the alleged population dividend, otherwise it becomes demographic Doom.

Think about the long run , if you continue to say you have growing GDP that cannot be reasonably explained by the formal sector, the world eventually will notice

 

[Mighty_Dragon_Strike]

too many words on this thread with little meaning!

 

[Vikramaditya1]

What about the changes in methodology, the use of benchmarks and the choice of benchmarks, and the lack of refreshing data

It's not just the base year, that sounds like an easy thing to do for a big win, so strange not to do it

That's because we had over 50% undocumented in economy. So they extrapolated it to already available sectors in the 2015, and did that upto 20. By then banking penetration went from 50% to 90%>. And resulted in the destruction of unorganised sector to less than 20%. (Note ban and all)

Like I said, rebasement will happen next year and the result will give some uncomfortable situations to a lot. IMF simply wants more data and add people into tax net. You know how IMF is.
Changing base year is not an easy thing it's a statistical nightmare. For a country like India, it's going to take a while.

Also India had the same C rating last year and before as well but nobody paid any attention to it because they know rebasement happens in February 2026. So all of a sudden this data issue came up, we know when an agenda is being played but not many people give a damn about these big talking point. Heck nobody even bothers about GDP growth rate. They want to see visible changes as long as they are getting it, data is simply a referance. But if people are not getting anything but the data seems to be pointing in the opposite direction then people are going to talk. This, is not that talking.

 

[hydrabadi_arab]

IMF's concern is about our old base year, i.e. they say we're under-estimating our GDP and rightly so.

“The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganised sector, which is actually declining. This is building up over a period of time,” Kumar said."

'IMF Concerns Justified; India's GDP Calculation Less Than Reliable': Arun Kumar and Pronab Sen

Arun Kumar said that he believes India’s actual GDP is probably 48% of what the official figure claims it to be.

thewire.in

Indian economists have been telling us since 2014 this when suddenly Modi economists started adding 2% extra growth after rebasing GDP.

Hopefully next rebasing is closer to reality but under Modi managed democracy its difficult.

 

[r3alist]

That's because we had over 50% undocumented in economy. So they extrapolated it to already available sectors in the 2015, and did that upto 20. By then banking penetration went from 50% to 90%>. And resulted in the destruction of unorganised sector to less than 20%. (Note ban and all)

So there you go, that's a reasonable basis to doubt the credibility of any model result -50% undocumented

Remember that other developed nations will have stronger data.

 

[CallSignMaverick]

“The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganised sector, which is actually declining. This is building up over a period of time,” Kumar said."

'IMF Concerns Justified; India's GDP Calculation Less Than Reliable': Arun Kumar and Pronab Sen

Arun Kumar said that he believes India’s actual GDP is probably 48% of what the official figure claims it to be.

thewire.in

Indian economists have been telling us since 2014 this when suddenly Modi economists started adding 2% extra growth after rebasing GDP.

Hopefully next rebasing is closer to reality but under Modi managed democracy its difficult.

"Kumar said this, Rakesh said that"

Copium is strong on this one.

 

[r3alist]

Like I said, rebasement will happen next year and the result will give some uncomfortable situations to a lot. IMF simply wants more data and add people into tax net. You know how IMF is.

Yes but that's a good thing imf are asking for, because then you need to adjust CPi for an appropriate basket with this data. And that 50% of GDP will apply to i guess 75% of the population, something big

 

[hydrabadi_arab]

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Miracle happen.

 

[r3alist]

Also India had the same C rating last year and before as well but nobody paid any attention to it because they know rebasement happens in February 2026. So all of a sudden this data issue came up, we know when an agenda is being played but not many people give a damn about these big talking point. Heck nobody even bothers about GDP growth rate. They want to see visible changes as long as they are getting it, data is simply a referance. But if people are not getting anything but the data seems to be pointing in the opposite direction then people are going to talk. This, is not that talking

I mostly agree that suddenly the imf woke up.

Visible change over proper data collection - are you sure boss?

I mean generally GDP is a type of abstraction these days with what ends up on national balance sheet, but even still, that amount of unreliability in the data, for so long, with generous assumptions on most the populations economic output is iffy.

 

[Mighty_Dragon_Strike]

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Miracle happen.

temples run the real economy, thats why, most Barhman Hindus here laugh on these posts!

if you are Brahman, you have enough deposited in your temple to have future secured for your generations!


ind. society is based on credit system which runs on caste system, where each temple's group of monks decide, who will come up the ladder and who will stay behind

but unlike other religions, this decision making, is solely based on caste, race and in some cases ethincity!

thats why temples pop up, which have the power to fulfill desires of the selected few which then become powerful folklore narrative!

 

[nahtanbob]

If inflation remains such low for an extended period it would only mean Indians have stopped spending due to lower demand and low purchasing power.

From the headlines, there is nothing to indicate a collapse in wages. There is no incentive for manufacturers to cut prices in India. The depreciation of the Indian rupee makes imports more expensive.

 

[Guynextdoor]

I mostly agree that suddenly the imf woke up.

Visible change over proper data collection - are you sure boss?

I mean generally GDP is a type of abstraction these days with what ends up on national balance sheet, but even still, that amount of unreliability in the data, for so long, with generous assumptions on most the populations economic output is iffy.

oh my god a new and spectacular way in which India will be destroyed. If only IMF had written to you they would have figured out India was fraud all along!!

 

[Mighty_Dragon_Strike]

Meanwhile shudras and dalits who make up 80% of population are happy with Rs300 daily wages as long as Adani/Ambanis become even more rich. Modi hai to munkin hai.

yes, too many believers in Brahamns would corrupt the system chosen by the powerful few

so, they need believers with strong faith for this system, so, many low level castes are needed!


for instance, it would not be ideal if every Brahman, becomes successful, because it would make price too hefty. So, to make that Brahman believe in the system, low caste believers are needed who worship them!

thats how economy runs

 

[Vikramaditya1]

So there you go, that's a reasonable basis to doubt the credibility of any model result -50% undocumented

Remember that other developed nations will have stronger data.

No. Undocumented doesn't mean they are hidden. It'll be reflected in consumption. For example someone sells something, but the factory output is taxed and you know from demand there is a consumption largely in cash.
You also skipped the part where I said the size of the undocumented economy reduced to less than 20%.

Yes but that's a good thing imf are asking for, because then you need to adjust CPi for an appropriate basket with this data. And that 50% of GDP will apply to i guess 75% of the population, something big

Wrong around 15-20%. Please read what I said carefully. Inflation data on PPI not CPI for quarterly growth.

I mostly agree that suddenly the imf woke up.

Visible change over proper data collection - are you sure boss?

I mean generally GDP is a type of abstraction these days with what ends up on national balance sheet, but even still, that amount of unreliability in the data, for so long, with generous assumptions on most the populations economic output is iffy.

It isn't sudden. I don't think you really understand what changing base year meant. Say in 2013 electronics manufacring and volume maybe insignificant and was given a weight of 0.25 (example) while oil industry a major sector then given a 3 point weight. But now electronics manufacturing overshadow Oil but when you calculate GDP the sector still use a 0.25 multiplier while Oil gets a 3 point multiplier. You ask why can't we apply the same 3 point weight to electronics but then you need to change the methodology for every other sector together or the data will be more inaccurate. Thet doesn't mean India don't count electronics manufacturing it is reflected in different sectors like consumption data, export data. IMF wants a more accurate approach in each sectors don't look at export data of electronics to figure out how much is produced and hence calculate GDP growth. I hope I am clear.

 

[Mighty_Dragon_Strike]

From the headlines, there is nothing to indicate a collapse in wages. There is no incentive for manufacturers to cut prices in India. The depreciation of the Indian rupee makes imports more expensive.

'collapse in the wages'!

what does that even mean?!