Indian Economy to outpace China this year

The Indian economy will grow by 7.4 percent this fiscal, outpacing China, to become the world's fastest growing economy, after a revision in the method of calculations, even as some doubts lingered on a revised methodology. The growth in gross domestic product (GDP) that was earlier calculated based on factor cost, has now been changed to constant prices to take into account gross value addition in goods and services as well as indirect taxes. The base year has also been moved to 2011-12 from 2004-05. The Statistics Ministry last month pegged the previous year's growth at 6.9 percent against previously estimated 4.7 percent, a revision that led to some economists including RBI Governor Raghuram Rajan seeking more clarity. Governor Rajan said more time is needed to understand the GDP numbers and they will be watching the February 9 release of numbers with great care. At this point it is premature to take a strong view based on these GDP numbers, he said. Industry chamber Assocham also said the revision was confusing as investment is yet to revive consumer demand is not returning with a significant paced, despite a sharp reduction in oil prices. The advance estimates released by the government also said the per capita net national income in 2014-15 is estimated to be Rs.88,538, up 10.1 percent compared to 2013-14.