Politicisation of GDP and job statistics can undermine data credibility
In yet another ‘revision’ of the GDP numbers over the last five years, we are now informed that GDP growth during this period peaked in 2016-17, the year of demonetisation. Growth in 2016-17 has been revised upward by more than a full percentage point or an equivalent of over ₹1.5 lakh crore, to 8.2 per cent. The growth for 2017-18 has been estimated at 7.2 per cent, up from 6.7 per cent earlier, while the current year’s growth, too, has been estimated at 7.2 per cent. It does strain credulity that growth during the DeMo year should have spiked, when other high frequency indicators point to the contrary. Indeed, it is unfortunate that India’s macro numbers should frequently become a matter of public debate. It was barely two months back when the controversy over the GDP ‘back-series’ broke out. The NITI Aayog took the lead in overturning the estimates of the National Statistical Commission report in August 2018, which showed the UPA years in a positive light. Curiously enough, the NSC report writers did not contest the rejection of their report.
But when the NITI Aayog disputed the National Sample Survey Office’s periodic labour force survey report last week, it promptly led to the resignation of the NSC Chairman and a member. Institutional autonomy looks increasingly fragile these days. In another recent episode, the NITI Aayog, which was purportedly set up to focus on long-term issues, has decided to take over the role of the drugs pricing regulator, the National Pharmaceuticals Pricing Authority. India can ill-afford to send out signals that its core macro data has been politicised, or that its key economic institutions lack the requisite autonomy.
The withdrawn jobs report points to a four-decade high in unemployment, at 6.1 per cent of the workforce in 2017-18. The jobs debate has become increasingly polarised with one side suggesting a spurt in jobs created, citing the increase in numbers enrolled under the EPFO. The other side cites various field surveys to point to jobs attrition. However, there can be no denying that the jobs crisis is for real; or else, it would not have emerged as a top political issue, with the government responding to it by doling out quotas for a wider section of economically backward communities. Rather than deny the existence of a crisis, the NITI Aayog should be able to initiate an informed debate with public participation on the matter. With the latest report having been held back, there is virtually no data in the form of NSSO and Labour Bureau surveys since 2015. The NITI Aayog should bring out a detailed report on the methodological issues involved in computing unemployment rates. It is disturbing that economic policy is made without reliable information on jobs created or lost. Jobs data gathering should be insulated from political interference, as with monetary policy numbers.
via Disquiet over data – The Hindu BusinessLine