The contentious loose ends in India's new GDP series data may have just become all too glaring to ignore anymore.Key data used to compute GDP numbers under the new method are now turning out to be patently dodgy, the Mint newspaper revealed in a potentially explosive report quoting the NSSO In what has suddenly lent a new seriousness to the bickering over contested GDP data , the National Sample Survey Office (NSSO) has found that 36 per cent of the companies taken into account for the new GDP calculation are either untraceable or had been categorised wrongly.There is a high probability that India's growth figures will decline if these "ghost" companies are removed from the data.The NSSO study, released last week, covered the 12-month period through June 2017. The findings turned out to be so unsatisfactory that two major reports prepared by NSSO based on them had to be subsequently scrapped.The disputable figures pertain to the MCA-21 database of companies of the Ministry of Corporate Affairs. The ministry had deemed these companies as "active companies" — those that have filed returns at least once in the last three years.Change of base year is done in line with global best practices to capture key info more accurately. From January 2015, the CSO updated base year for GDP calculation to 2011-12, replacing the old series base year of 2004-05, as per NSSO's recommendations. A base year is carefully chosen because of the critical impact it has on data.The new series opted for the MCA-21 database, replacing the earlier source which used to RBI data on company finances. The shift was based on the idea that more detailed corporate sector info and better unorganised sector data points would make it a more watertight data set.After the change in the base year, previous several years' GDP numbers were revised to arrive at a fair comparison. The new series adjusted GDP numbers for fiscal years 2005-12 using new methodology with FY12 as the base year.GDP growth during UPA's came out lower with a peak of 10.3% in FY11 (later scaled back to 8.5%) under the back series. It also showed the first four years under Modi as clocking a higher average growth compared to the UPA years.Following the back-series revision, average growth under UPA for FY06-12 fell to 6.82% from the earlier 7.75%. In comparison, average growth in four years under Modi was found to be 7.35%, significantly higher than the Manmohan-era numbers.Modi's opponents were quick to take the new series to the cleaners, likening it to a similar earlier attempt that had backfired. An August 2018 recalibration, carried out by NSSO's Sudipto Mundle panel, had showed UPA years as better than NDA ones.The use of MCA-21, which the CSO sourced from the Corporate Affairs ministry, was one of the most important changes made to the computing process when the new GDP series was launched in 2015. Several noted economists had raised red flags when this database was first introduced in the National Accounts calculations, the report said.What worried economists most was the fact that an untested database such as this would very likely have a large number of shell companies or sham entities which existed only on paper. Another big worry was the methodology, which many experts said would result in inflated estimates.The ministry was urged by many experts to first release the MCA-21 data to researchers to prevent faulty data points from impacting the final figures. Even most of the backers of the new series — who thought the new method was better in many ways than the old one — wanted it vetted by experts before putting it to use.Although the CSO has not yet made the data public, it has so far held out against the barrage of criticism.Statistics experts said the use of untested database for computing such major data has cast doubts on the very reliability of India's numbers regime, already reeling under a credibility crisis. It raises many troubling questions about the fall of the once vaunted Central Statistics Office (CSO), Mint quoted statisticians as saying.NSSO stumbled upon these serious anomalies while the 74th round of its survey of the services sector was underway, the report revealed. 15 per cent of the companies in MCA-21 — which lists details such as addresses — were found to be either closed or untraceable.21 per cent of the companies turned out to be "out of coverage" — which meant they were not functioning in the service sector despite having registered themselves under that head and continuing to feature in official data as service sector entities.Even many of the correct entries — those registered under and operating in the service sector — either didn't answer NSSO's questions, or had not maintained any useful data.The issue of non-response was the starkest in the case of companies picked from the MCA-21 database, the NSSO said. About 45% of MCA units were found to be "out-of-survey/casualty" while the "economic census/business register" frame had about 18% such cases, the Mint report said quoting R Nagaraj, Professor, Indira Gandhi Institute of Development Research.He stressed that MCA-21 needs to be made public, insisting that a proper audit be carried out by independent experts.