When even the Prime Minister of India admits that he has no idea how many jobs his Govt is creating, doesn’t it point to a serious issue – data collection and reliability?
The IIP or CPI or GDP when it comes, somehow, be it good or bad, the underlying emotion is always that is mistrust. When did we get into this situation where we take every data with a pinch of salt. If we were pointing fingers at China, how different are we today?
Few days ago, two researchers – SBI’s Soumya Ghosh and IIM Bangalore’s Pulak Ghosh – both came to the same conclusion that jobs were indeed being created but because the surveys are being conducted designed, it is not getting reflected in actual numbers of job creation. On the other hand, economics data veteran and a very well respected name, Mahesh Vyas of CMIE said that employment was not really going up despite the economy showing an uptick. So whom to believe?
Take the case of the IIP data too. It continues to be data which is manufacturing dominated when almost 50% of India’s GDP comes from services. Actually services are growing much faster than manufacturing with a much bigger base, yet, even after so many years, we have zilch to capture this data. Ditto for CPI and WPI – both inflation data do not take into account the cost of services at all. What is baffling is that today we have a Goods and Services Tax and that means, more data on services than before. Yet we are nowhere close to even mooting a change in the way IIP and inflation data is calculated.
Regarding GDP, even since the Govt changed the methodology of calculation, growth comes in much higher and somehow, this is what changed our perception from trust to mistrust. Take anything – be it Swachcha Bharat data or that on Ease of Doing Business, the data is so cut off from what we actually see and experience.
Add to this the talk that the Labour Bureau which indicates employment levels is planning to stop its quarterly surveys and well, we all know how RBI handled the ‘note counting’ during demonetization.
The Govt does not seem to be care or perturbed as all the data which is coming out if good; as long as that’s the case, why topple the fruit cart, right? The very fact that India does not have a Chief Statistician from the past eight months; the fact that there is no Chief Economic Advisor and there is confusion over who really runs the Finance Ministry. Apparently, there is no treasurer too.
Does this mean that data has become big politics today? Thus the question – can we rely on politics, ever?
The Chinese in 2007 admitted that their GDP numbers used man-made numbers and thus labelled it as unreliable – this was admitted by none other than their own premier, Li Keqiang. They then shifted to electricity production, rail cargo shipments and loan disbursements to give a better picture on growth rates. When do we admit our fallacies and change for better?
Right from Budgetary allocations to RBI’s interest rate decision, all depends on Govt data. Haven’t we got to get that right first?