On Monday, one of India’s top business newspapers took a significant stance in its lead editorial: “[The government] should withdraw the announcement regarding the back series of the GDP data,” said the Business Standard. “The data does not align with that from the real economy... This reflects poorly on the ability of the back series to accurately reflect what happened during these 10 years.” The newspaper was referring to the release of back-series GDP data last week, which re-calculated economic performance in the decade under the Congress-run United Progressive Alliance and found that, contrary to previous numbers and most indications, it had been worse than growth under the current Bharatiya Janata Party regime.
There was much criticism of the GDP back series data when it was released last week. This was in part because of the circumstances: The government had rejected another panel’s calculations that showed growth under the Congress actually being better than previously thought; a press conference to unveil the “more accurate” data was hastily canceled in November with the government saying it would hold more consultations; and the data was unveiled by the government think tank NITI Aayog, instead of just the Central Statistical Organisation, raising questions about politicisation of data.
But Business Standard’s call for the back series to be withdrawn altogether reflects the seriousness of concerns, in the eyes of the newspaper and many other experts, that these figures have damaged India’s reputation for having reliable economic statistics. The withdrawal demand comes on the back of credible questions, both about the data itself and the manner in which it was put together.
The newspaper, for example, reported on how the newly calculated figures for GDP growth in the UPA years – which lowered the average growth rate from 7.75% over the decade to 6.7%, below the average of 7.3% under the current government – did not seem to be consistent with other data points from the real economy, such as corporate earnings, the stock market, private sector capital expenditure, exports and more. Economist Vivek Kaul pointed out the same thing, while looking instead at indicators like domestic car sales, domestic tractor sales, coal despatches and more. The data has not passed these basic smell tests, prompting demands for a clearer explanation of the methodology that went into calculating the new numbers.
Meanwhile, there has also been much criticism of the manner in which the data was released. Former Chief Statistician Pronab Sen has highlighted the involvement of the NITI Aayog, saying even the presence of a more political body is troublesome. Economist Ashok V Desai questioned the entire exercise, saying even if the numbers are not wrong, the approach is strange and the Central Statistics Office needs to explain itself. Bloomberg’s Andy Mukherjee asked whether India’s statistics will now depend on which government is in power when the numbers come out. Even Surjit Bhalla, an economist who is on the Prime Minister’s Economic Advisory Council and is usually supportive of the government, wrote that “I, along with others, also found it inappropriate for NITI Aayog to be directly involved in the presentation of statistical data by the CSO.”
The criticism has clearly gotten to the government, at least to some extent. In an interview to the Indian Express, NITI Aayog Vice Chairman Rajiv Kumar defended his organisation’s involvement saying the criticism is “unfair” and that both the Central Statistics Office and NITI are components of the government of India, “so where is the issue?” He claimed that when the Central Statistics Office was about to release the back series, the NITI Aayog was asked to take a look at the data.
Despite Kumar’s tetchiness about the issue – he has also agreed to debate the numbers with Congress leader and former finance minister P Chidambaram – it is unlikely that the call for the data to be withdrawn will go anywhere with this government. But the whole exercise does bring to mind Modi’s comments to Swarajya in June, when the prime minister claimed that he did not put out more details about the economy in 2014 “for India’s benefit”.
Modi said this as if it were a favour to the Opposition and India, claiming that the BJP had put leadership ahead of politics instead of highlighting how bad things had gotten under the previous government. However, the comment also highlighted a rather cavalier attitude towards data. If Modi was willing to hide information about the public then, for the “sake of the country”, who is to say he wouldn’t do it again?
Indeed, his response to questions about job creation have only confirmed this impression, with Modi saying the problem is not lack of jobs, but lack of jobs data. Coupled with the concerns raised about the GDP calculation, it is clear that there is limited trust in this government’s fidelity to the accuracy. It is not enough, now, for the government to simply dismiss all criticism as being politically motivated. If this government cares about India’s reputation, it must ensure that the CSO explains how it arrived at the GDP numbers, allow for consultation with a wider set of economists and update its models if credible questions are raised. Any less would be proof that the Modi government is willing to undermine yet another institution for short-term political gain.