''INDIA'S GROWING-ECONOMIC INSTILL'' : 2/3

FOR decades, India has been following a simple approach :

The government counted the quantities of various goods and services being produced. It was a broad sample survey, and the government then used the estimated prices for their goods and services to calculate growth.

Countries around the world, including the United States, once used versions of  of that approach, although industrialized countries mostly abandoned it over the last last several decades.

But growth statistics produced by this method are highly dependent on the price estimates.

For example, if you are counting cars, you could miss the economic growth that occurs as manufacturers charge  more for their cars when they add fancier engines or or leather seats.

The new method - which India has embraced - relies on financial data reported to government.

The financial results of 900,000 companies incorporated in India are assessed to gauge the country's  total economic activity.

India is one of the first developing countries to adopt this method.

But small businesses abound in India, and until the past couple of years, they operated almost entirely on cash. This so called - informal economy, including agriculture, represents nearly half of India's economic output.

The new statistical method assumes that the informal economy will go up and down in parallel to the incorporated companies.

Most of the time, that is a fair assumption, said Pronab Sen, a longtime civil servant who oversaw India's economic statistics and the introduction of the new system before retiring in 2016.

But small businesses were able to cope with some big structural changes of the Modi years, he said.

''Corporate India is doing very well,'' Mr. Sen said. ''Noncorporate India, which accounts for about 45 percent of the economy, is not.''

Mr. Modi abruptly recalled the country's large-denomination currency bills in November 2016. It was mostly unsuccessful effort to catch people skirting taxes.

Large businesses could adapt by asking customers to use credit-cards or bank wire transfers for  easier transactions. Small businesses, reliant on cash, suffered months of severe disruption.

The honor and serving of the latest operational research on ''India and Economics'', continues.