The government has appointed a three-member expert panel to measure the accuracy of the new gross domestic product (GDP) series used to assess economic activity in the country.
Earlier this year, the Narendra Modi government had introduced new way of calculating GDP data to match global practices. The new interpretation of data left many economists puzzled, as the picture on the ground remained weak.
The government has asked the panel to review the manufacturing data used to calculate the GDP growth.
The committee, to be chaired by National Statistical Commission (NSC) chairman Pronab Sen, will check whether the manufacturing data used in the new GDP series had any inconsistencies. The committee will also examine the services sector data, Livemint reported.
Former head of the Central Statistics Office (CSO) A.C. Kulshreshtha and NSC member Ramesh Koli are the other two members of the committee.
Using the new GDP series, the CSO said that the Indian economy grew 7.5 percent in the fourth quarter of 2014-15. But the growth in the GDP did not match poor earnings posted by Indian companies in the March quarter.
"At face value, GDP figures for Q1 suggest that India is the fastest-growing major economy in the world. In reality though, the GDP data remain wildly inconsistent with numerous other indicators that point to continued slack in the economy," said Capital Economics in a note after the release of GDP data last week.
Also, bank credit growth, a major indicator of economic growth, slowed to a two-decade low in the fiscal year ending March. In 2014-15, credit growth went up by 9.52 per cent against 13.83 per cent increase in 2013-14.
The index of industrial production (IIP) slowed to a five-month low of 2.1 per cent in March 2015 from 4.9 per cent in February, as all segments in the manufacturing sector witnessed a decline.