Chief statistician T C A Anant has attributed the high level of discrepancies in the second advance estimate of growth to a lag in data availability and stressed that it will not have any bearing on overall GDP.
"These (discrepancies) are because we are doing allocations based on rule of thumb linked to earlier survey and production is based on the current exercise. This mismatch is called discrepancy. It does not have any bearing on the overall GDP," Anant said in an interview.
The second advance estimate, released on February 28, was arrived at by factoring in mismatches or differences of GDP calculated through different methods to the tune of Rs.1.18 lakh crore, or 1 per cent, of the economy. It was Rs.45,407 crore, or 0.4 per cent, of GDP in 2015-16.
The Central Statistics Office has pegged the GDP growth at 7.1 per cent for the current fiscal in the second advance estimate, the same as the first one released in January this year.
Elaborating, Anant said, "It (discrepancies) is simply a reflection of data allocation which we have done on expenditure side... Discrepancy must belong to either consumption or production."
Asked why the discrepancies were so high this time, he said, "It depends on your production. It happens. As more data become available, the discrepancies will come down."
He also said, "When we will get full accounting data of companies, the government etc, we are able to reduce the discrepancies to a considerable level. Discrepancies have an identity relation because whatever is produced must be consumed."
Earlier this week, a parliamentary panel stated that the GDP data based on 2011-12 base year do not reflect the momentum of economic activities across the spectrum and a more realistic methodology is required.
The parliamentary standing committee on finance in its report tabled in Parliament also pointed out that several experts have talked about the possibility of overestimation of GDP for 2016-17 in the wake of demonetisation.
"The new series of National Accounts with 2011-12 as the base year has raised more questions than answers. The GDP data do not seem to reflect the momentum of economic activities across the spectrum. It is, therefore, imperative that a more realistic computation method be adopted with a view to enhancing the credibility of official statistics," the panel has said in its report.
Explaining the delay, Anant said, "We use production and expenditure approach. The data availability for these different accounts is different. We get much faster data on production account and somewhere slower data on the expenditure side. Since we have less data on expenditure side, we make allocations based on well laid-out principles."
He also clarified that discrepancies are typically less in annual accounts than in quarterly ones. They are typically more in advance estimates than in later revisions as more data become available.