New Delhi, Dec 3 (NationPress) The latest Article IV annual review by the International Monetary Fund (IMF) concerning India’s economic structure indicates that the nation’s robust economic trajectory is attributed to prudent macroeconomic strategies and previous structural adjustments. Furthermore, it projects that despite facing external challenges, growth is anticipated to remain strong, with inflation staying low.

Curiously, the IMF has assigned a C grade to India’s national accounts statistics, which encompass crucial metrics like Gross Domestic Product (GDP) and Gross Value Added (GVA). Overall, India has achieved a commendable B grade across all data categories, which range from A to D.

The IMF critiques the methodology behind India’s statistical framework but does not cast doubt on the integrity of the data.

According to the IMF, “National accounts data are accessible with adequate frequency and timeliness, providing sufficient granularity. Nonetheless, some methodological flaws slightly hinder surveillance, justifying an overall sectoral rating of C for the national accounts.”

It notes “significant discrepancies” between GDP estimates derived from production or income perspectives versus those from expenditure perspectives, interpreting these inconsistencies as proof that household consumption and parts of the informal economy are not completely represented. The report also emphasizes the limited application of seasonal adjustments and the potential for more detailed quarterly data.

For instance, it points out that an “outdated base year” of 2011-12 is the foundation for this data, and the reliance on wholesale price indices for deflators is due to the absence of producer price indices.

Interestingly, an article in Saviours magazine indicates that the IMF has overlooked the scrutiny that India’s public finance and accounting systems undergo by the Comptroller and Auditor General, an independent constitutional entity tasked with auditing all financial inflows and outflows of both the Union and State governments. Reports from the CAG are presented in Parliament and state assemblies, subject to examination by Public Accounts Committees and various standing committees across party lines.

Additionally, government borrowing is facilitated through the Reserve Bank of India within explicit statutory and rule-based boundaries. Budget documentation, RBI publications, and CAG audit findings corroborate each other, reinforcing the reliability of India’s National Accounts framework.

The article further emphasizes that direct and indirect tax revenues are meticulously monitored through advanced administrative and IT systems, reconciled with treasury accounts, and reported promptly. Corporate accounts also undergo statutory audits in accordance with company law, especially for publicly traded companies. Despite methodological shortcomings, national accounts are thus constructed upon a foundation of verifiable monetary flows.

Moreover, the article highlights that much of the misconceptions stem from external observers perceiving India’s informal economy as a vast statistical void that eludes accurate measurement. However, this perspective is outdated and misleading, as the informal economy has progressively integrated with the tax, banking, and regulatory frameworks.