Chief economic adviser V. Anantha Nageswaran has rejected criticism of “statistical discrepancy” in the first quarter GDP data, saying when the same statistical authority reported the severest contraction in the first quarter of 2020, the naysayers had called it credible as it suited their narrative.

“In Q1 (first quarter) of 2023-24, the discrepancy of 2.8 per cent has a plus sign. This indicates that the expenditure side has explained only 97.2 per cent of the income side. It does not mean that the 2.8 per cent that has yet to be explained does not exist,” Nageswaran said in an op-ed article.

“It exists and lends itself to being explained in subsequent quarters. Similarly, the preceding eight quarters have shown negative discrepancies. It means that the expenditure side has been over-explained and needs to be reconciled,” the article co-authored with senior government economist Rajiv Mishra said.

Over a long period, the negatives and positives offset each other, it said, adding that between the first quarter of 2011-12 and the first quarter of 2023-24, CAGR of real GDP (quarter-on-quarter) between the two approaches (income and expenditure) was 5.3 per cent annualised.

Therefore, it said, “The insinuation that GDP is exaggerated does not hold ground. The income side approach has not always been higher than the expenditure side.

“There has been a fair distribution of discrepancies since 2011-12 within a range of 6.4 per cent to (-) 4.8 per cent. The latest quarter discrepancy lies well within that. This is easy to verify.”

The article was written in light of economist Ashoka Mody, a Princeton University professor, raising concerns regarding the GDP growth rate for the first quarter of the current fiscal.