Confusion over India's GDP

India's Statistics Ministry reported Monday growth domestic product (GDP) in the country would rise by 7.4 percent in the current fiscal year ending March.

Under a recently introduced new formula for calculating economic performance, the authorities had earlier revised the forecast expansion to 6.9 percent from 4.7 percent.

The new figures presented Monday surprised both domestic and international experts as Asia's third-largest economy had widely been believed to be struggling through its worst slowdown since the 1980s with growth below 5 percent and hence not enough to generate enough jobs for millions of young people.

Lot of guess work involved

But the new data suggested that India's economy was in fact expanding fast, with officials saying the new formula was closer to international standards. GDP is now measured with a focus on actual market prices to incorporate "gross value addition" in goods and services as well as indirect taxes.

Analysts warned, though, the new method did not correlate with some other important economic indicators such as corporate profit and last year's industrial output.

"These numbers come as a surprise and we are in the process of trying to understand them," said D.K. Joshi, chief economist at local ratings agency CRISIL.

Growth revision figures came out weeks before India's annual budget is to present on February 28, putting Finance Minister Arun Jaitley under pressure as he needs to work through the statistical cloud in drafting the budget.

hg/sri (AFP, dpa)