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STATE OF ECONOMY
Authentic narrative missingG. Srinivasan
P. Chidambaram
“Lies, damn lies and statistics” is what the advocate of the dismal
science called economics used to decry when figures are used,
abused and misused by the malleable authorities to suit their
narrow ends of scoring political brownie points of their masters or to
browbeat opponents into accepting their alternative truth! In these
days of fake news when any authentic narrative is at a premium,
people are not amused when they are constantly bombarded with fresh
release of official figures to obfuscate the picture that the domestic
economy did not grow well in the previous dispensation as was widely
claimed or its own performance is a shade better with the incumbent taking
charge of office since 2014 May. A synoptic summation of the raging row is that after averaging an annual GDP growth rate of 6.4 per cent year on year during 2012-14, growth in India increased to 7.3 per cent during 2015-17. In the first quarter of 2018-19 (April-June) its rise was a stupendous 8.2 per cent and it slowed down to 7.1 per cent in the next quarter July-September 2018. Given the macro-economic headwinds in the form of two droughts, demonetization and the adverse impact of an ineptly introduced GST, this glistening growth saga appear logically incongruent to ground reality, dispassionate analysts wryly say. The timing of the new release, as it comes closer to the general election, indubitably renders its links with electoral politics compulsive, notwithstanding the contrary claims made-by the higher echelons in the political dispensation or administration. Be that as it may, the release of the past national accounts statistics based
on the latest base year through back-casting or reworking is a periodic
exercise that governments resort to unfailingly in order to discredit the
erstwhile dispensation or infuse confidence into the minds of the people
that their management of the economy is a whit slicker than the previous
ones! The data collated and computed by the Central Statistics Office (CSO)
from 2005-06 to 2011-12, the new base year and released by the Niti Aayog
became a bone of contention between the ruling party and the principal
Opposition the Congress which ruled for a decade 2004-14 when it was
ousted from power by a relatively unknown but resourceful State leader
from Gujarat of the BJP. Sanjeev Sanyal In the case of 2012-13, it was revised up significantly twice from 4.7 to 5.1 per cent and then further to 5.5 per cent. In an interview to print media the principal economic adviser to the Ministry of Finance Sanjeev Sanyal maintained that the new series increased the growth rates for certain years of the previous government and was hailed. If the same methodology now lowers the growth rates of earlier years because of back-casting or reworking, it is being frowned upon as fudge, argue some analysts. TCA Anant Yet another former chief statistician TCA Anant said that ‘you can slice and dice the data anyway you want, but India’s GDP growth rate between 2004 and 2011 were bound to come down in the back casting computation effort”. He ascribed the uniform fall in GDP growth rates from 2004 to 2011 to the stastical effect and partly to a decline in the tertiary (services) sector gross value added (GVA) due to changes in the methodology. The succinct point is that such a revision or re-working is bound to ruffle the feelings and leave the layman confused about the veracity of figures that keep constantly changing to suit the political winds.
Pronab Sen
From the authorities’ side, the
defense of data revision is founded
on solid facts. The new back series
data has been generated by a
thoroughly professional body, the
CSO and the tools and techniques it
deployed have been duly
scrutinized by experts with domain
knowledge, including former chief
statisticians and the Advisory
Committee on National Accounts
Statistics.
Rajiv Kumar
Member Surjit Bhalla had written
that NITI Aayog presence was
inappropriate. However, economists of
repute have reasoned that the
official back data on GDP runs
the risk of denting the market’s
trust and belief in official data
released by the government
bodies. The new data release
impugns the earlier findings of a
committee of the National
Statistical Commission to
develop methodology for
deriving back data by linking the
old series with the new base year
of 2011-12. One thing is perspicuous that pertains to the timing of the new release, as it comes closer to the general election. This indubitably renders the links with electoral politics compulsive, albeit claims to the contrary by the higher echelons in the political dispensation or administration. |