IIP base revision to up FY11 GDP estimates to 8.9%: Crisil

Credit rating agency Crisil today said the revision of base year for calculating Index of Industrial Production (IIP) is expected push up GDP growth for 2010-11 to 8.9%, from the current estimates.

The final economic growth figures for the last fiscal are yet to be released. While the GDP estimates took into account IIP numbers, compiled by the Central Statistics Office (CSO), based on 1993-94 as the base year, the new figures are based on 2004-05.
"The revision in IIP calculation, a key component of GDP estimation, is expected to up the GDP estimates for 2010-11 from 8.5% to 8.9%," Crisil said in a statement.
Large revisions in GDP estimates in the recent years have led to questions on the robustness of these estimates. As the most important economic indicator, GDP estimates influence policy making, requiring accurate estimation, Crisil said in a study titled 'How robust is India's GDP estimate?'.
"Our study finds that the current method of computing GDP underestimates the size and growth of the Indian economy, and identifies four key issues with respect to accurate estimation of India