Dirty data

It is high time that those responsible for maintaining economic statistics sincerely maneuvers to restore people’s confidence in official economic data.

The fundamentals of Indian policy making is under deep suspicion now with an ever increasing erosion of authenticity and quality of India's economic data. It is unfortunate that even macro economy data such as inflation, GDP figure, and IIP or export rate, which are the backbone of the economy, have been misreported in India, let alone micro economy data. Whole data quality in the country is dubious and is being put under serious question by various corners. Finance Ministry itself questioned the veracity of statistical data given by one of its own arms i.e. Central Statistical Organization (CSO). Such incidents strengthens the roots of unreliability in the minds of investors, economists, policy-makers or researchers who find themselves confounded with whether to trust on India’s officially acclaimed economic data or not.

As above mentioned, inflation, GDP, Export data and IIP are four major key determinants of monetary policy and surprisingly statistics of all these significant data have been wrongly reported time and again. To discuss recent examples, the IIP growth figures for January 2012 were scaled down sharply to 1.1 per cent from earlier estimates of 6.8 per cent. The reason given was wrong reporting of sugar data, which stood at 58.09 lakh tonnes, not the earlier reported 134.08 lakh tonnes.  It is surprising that no statistician could notice unprecedented surge in sugar production data. Apart from this, GDP data for the first quarter of 2010-11 was also miscalculated because the price deflator was incorrectly used. A similar error was reported in country’s export data in 2011 which was erroneously inflated by $9 billion due to some software glitch. Besides, it seems that inflation miscalculation in India has become somewhat a norm. Last year within a span of six months inflation data was revised two times first in April (March inflation data) then in July (April inflation data). All these glaring errors are suggestive of lackadaisical attitude of Govt. that it cannot even ensure to provide authentic statistical data of the country.

It is paradoxical that India who trumpets its being IT-power could not even manage to develop an efficient quality of data-estimation. Not only does it faulty, but also incomprehensive. Many commodities and services are left in data aggregation. Sometimes when prices on certain products come too late to be included in the data release, the missing quotations are repeated or estimated depending on commodity nature which certainly not gives a clear but notional picture of reality. Given creaky data collection system in the country, it is grossly pathetic on the part of Govt. if even data computation falls prey to languid system. Getting data estimates wrong bears sweeping repercussions on policy-making. Socio-economic welfare of the country rests on acquiring correct socio-economic data such as education, health, poverty, unemployment, birth rate, death rate etc., collection of which is worse than macro economy data and which is a major factor that impedes the crafting of policies that can strengthen the links between growth, poverty reduction, and development.

Robust and authentic economic data is the least that a Govt. is supposed to provide transparently. It is pertinent to recall the repercussions European Union faced due to data-fizzing executed by Greek Govt. just to avail EU’s membership. Highly significant it is for Govt. worldwide not to fiddle with statistical data because sooner or later harsh and hidden economic reality does bare itself resulting in to disastrous aftermath. It is high time that those responsible for maintaining economic statistics sincerely maneuvers to restore people’s confidence in official data which is the grist of each policy-formulation and economic decisions.