India’s official data such as that on the IIP or GDP has often been dogged with controversy, the most recent of which was the rebasing of the GDP series soon after Narendra Modi assumed office. The rebased GDP didn’t seem quite right since, even in the face of obvious economic distress, it bumped up growth significantly from the 5% or so levels it was at that point in time. But, apart from the fact that controversies arise each time a rebasing takes place, those who suspected Modi was behind the rosier numbers needed to keep in mind that the exercise was begun under the UPA and even the methodology was finalized then. Matters got worse a few months ago when, while the Sudipto Mundle-panel’s GDP back-series bumped up the UPA-2 average growth to 8% per year, this got lowered to 6.7% in the revised back-series versus the Modi government’s average of 7.35%. That this back-series, which lowered UPA-2 growth to below the NDA’s, was not released by the central statistics office (CSO) but was made public by NITI Aayog deputy chairman Rajiv Kumar added to the controversy since his was a political appointment.
It didn’t help that the NITI Aayog back-series was also inconsistent since the GDP numbers it put out didn’t quite square with other facts. The FY06-08 period, for instance, was one of scorching growth in investment, when gross fixed capital formation (GFCF) averaged around 31.5% of GDP, so it jelled with the fact that GDP growth averaged 9.5%. For the UPA period as a whole, GFCF-to-GDP averaged 31.8% and GDP grew at 7.8%. It is a bit difficult to believe, then, that a GFCF of around 28% can produce an 8% GDP today; for this to be true, productivity should have shot up so dramatically. Nor were the inconsistencies related to just the investment data. During UPA-1, when GDP averaged 8%, credit grew at 29.3%; this fell to 16.3% as GDP growth fell to 6.7% in UPA-2. In which case, how is an 8.6% credit growth—the average since Modi came to power—giving an average GDP growth of 7.4%?
Even so, former chief statistician of India TCA Anant put up a stellar defence of the back-series data, the most important of which was that a new series of corporate data – that boosted estimates of GDP – was available for recent years, but not for the years before that. To that extent, his argument was that, while this lowered GDP growth in the back-series, that was unfortunate since, once there was better quality data available, even if for a limited period, it made sense to use it.
Matters have, however, really come to a head with the chairman and another non-government member of the National Statistical Commission (NSC) resigning as a result of which there are now no external members in the Commission to vouch for the integrity of the CSO data and process; the NSC was set up in 2006 to recommend reforms in India’s statistical system and for oversight of the work done by the various statistical bodies like the NSSO. This is all the more unfortunate since, apart from the furore over NITI Aayog driving the GDP back-series computations, one of the areas of controversy is over how jobs have fared in the Modi period and, while the NSSO’s employment survey for 2017-18 was to shed light over this, the trigger for the resignation appears to be the fact that the data has not been released by the government despite the NSC approving the report over a month ago. Since the chairman of the NSC said one of the reasons for his resignation was that he was not being taken seriously—apart from the government not releasing the NSSO survey—it puts another cloud on the official data and strengthens the view that jobs growth in the Modi period has been poor.
via Cloud over CSO data casts shadow on jobs claims – The Financial Express