On Thursday, the International Monetary Fund approves India's revised GDP calculation methodology to state that it aligns with best practices and is consistent with IMF's advice.
Krishna Srinivasan, Director of the IMF's Asia and Pacific Department called India's GDP base revision a 'welcome development'. Speaking to reporters in Bangkok, Srinivasan said India's updated methodology completely matches the advice provided by the IMF's statistics department.
India had also issued a note to explain the revisions of GDP methodology, he said.
"In terms of GDP numbers, what they have done is consistent with good practices. I would say there's always room for improvement, but let's recognise the good work done by MoSPI (Ministry of Statistics and Programme Implementation) for improving GDP statistics," he said.
Exchange rate should not be sign of economic failure, India managed to subdue the energy shock because of strong fundamentals of its economy, IMF official said.
The exchange rate is "a function of global interest rates, investor risk appetite, and oil prices", he said, adding that the pressure on the exchange rate does not point to a real disconnect with growth.
IMF's Regional Economic Outlook for Asia and Pacific released on October 15th, outline India among the emerging economies that has faced currency pressure due to energy shock. The pressure was partly eased over the past few months and listed India among the economies that stepped into markets of foreign exchange.
In September, a political controversy broke out when government released better than expected GDP growth figures for June quarter by using the updated GDP methodology.
Former finance secretary S.C. Garg questioned the India's June quarter growth rate and claimed that GDP data was artificially boosted by compressing previous year's figures.
Opposition parties jumped into Garg's argument and questioned the integrity of the government's GDP data.
Chief Economic Advisor V. Anantha Nageshwaran termed Mr. Garg's approach as "cherry-picking" of data.
He said the latest GDP figures were compiled using the financial year ending in March 2023 as the new base, and a change in methodology led to revisions to last year's quarterly data
