Thread by @sanjeevsanyal

Very glad to see former skeptics derive such satisfaction from the new national accounts methodology; even going into the arcane details of how The Committee on Real Sector Statistics suggests a back series on 2011/12 base. Healthy sign of growing economic literacy 1/n

The suggested back series shows that growth had already accelerated to over 8% in 2003/04, following a series of important reforms under PM Vajpayee. Thus, the strong performance of subsequent years had a lot to do with momentum that had already been built up 2/n

It will be argued that the choppy growth performance after 2008/09 was partly due to external factors. Fair point, but surely the same can be said of the exceptionally benign external environment prior to the global crisis. One cannot blame one & take credit for the other 3/n

The real issue was not so much headline growth, but macro-instability and quality of growth. Avg CPI inflation 1999-04: 4.1%, 2004-09: 5.8%, 2009-14: 10.4%, 2014 to now: 4.7% (used World Bank data comparable across time periods) 4/n

The current account as % GDP showed the following trends:
1999-04: + 0.3
2004-09: - 1.1
2009-14: - 3.3
2014-now: -1.2
(Again to for consistency & international comparability, used WB data) 5/n

The above indicators are merely illustrative of trends in macro-stability. One can list out a number of other issues hidden under the headline growth performance during 2009-14: quality of bank lending which was sharply expanded, oil bonds, fiscal deficit and so on. 6/n

An interesting facet of the newly suggested back series is that it consistently depresses growth rates upto 2002-03 & increases it subsequently. One needs to look into what causes this systematic shift. Not suspicious, just curious. All methodologies will have such quirks 7/n

In case you wish to see what credit expansion of the 2005-13 looked like, This is Domestic Credit created by financial system as % GDP (source World Bank)