Calculation of economic growth figures

The way economic growth percentage figures are calculated remains a mystery. The hoi polloi see newspapers reporting 8% growth for India in 2010. The very next day, the same news paper quotes some other agency predicting 9.5% growth. The common man gets totally confused. Unless he is sure at what rate the country's economy will grow that year, how can he carry on with his day to day life ?

He will worry about it when he is waiting in line to purchase rice and dal at the fair price shop. He will worry about it when he is travelling on the footboard of the local public transport bus on his way to work trying to keep elbows and smelly arm pits out of his face. He will also keep thinking about it when he is fighting for a bucket of water at the friendly neighbourhood tap. The worry will plague him when he is lying awake sweating at night whenever there is a power failure. Nor will it let him negotiate potholed roads in peace.

So in the interest of the greater common good, I decided to investigate how exactly the Government arrives at growth figures. This was no mean task. It entailed hundreds of visits to the library, several RTI petitions and numerous references to tomes of economic books. I can finally claim to have arrived at the magic formula.

Here's how it is done. Beginning of every year, the PMO (Prime Minister's Office) calls for a meeting. Sub-Junior officers and clerks from the Planning commission, IMF, World Bank and the RBI attend this meeting. The PM himself chairs this essentially number-crunching meeting. Growth figure estimates are taken from each organization. For ease of understanding, let's call them A, B, C and D respectively. (Again for ease of understanding, let us not get into the nitty gritty of how each of these organizations arrives at A,B,C and D in the first place.)

Growth figure for India for the year is calculated using the formula
Growth Figure=((A+B+C+D)/4)raised to the power of n, divided by n factorial, whole raised to the power of 1/n where n is the year in question, 2010 for instance.

Let's call this figure X. If a majority government is in power, X is multiplied by 2. If a coalition government is in power X is divided by 2. Then 1.8 percentage points are added to budget for any discrepancies in A,B,C and D figures. This number is then released to the media as growth estimate for India for that year.