In India, the GDP and the gross value added (GVA) seem to be giving conflicting signals on economic recovery during FY21. This happens because of the definition of these two numbers.
For instance, GDP was projected to fall by 8 percent in the fiscal year 2020-21 (FY21) by the second advance estimates (AE), sharper than 7.7 percent by the first one. On the other hand, GVA is projected to fall 6.5 percent in the second estimate. The first estimates pegged the figure at less than 7.2 percent.
Also, while GDP was projected to fall 1.1 percent in Q4, GVA was forecast to grow by 2.5 percent in the same quarter by the second AE.
This mismatch happens due to a change in the definition of GDP in 2015 with effect from 2012-13 on the base year 2011-12.
The revised method of GDP did not only change the base year, but also the way it is computed.
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