India’s Congress party vows to ‘clean up’ economic data gathering if it wins election
Economists and investors have doubts over the reliability of official figures
New Delhi — India’s main opposition Congress party will review how economic data is collected and interpreted if it wins a general election in May, a senior party official said, amid doubts over the reliability of official data.
Economists and investors are increasingly showing they have little or no confidence in India’s official economic data, presenting whoever is elected prime minister with an immediate problem.
Palaniappan Chidambaram, a former finance minister and senior party leader, said a Congress government would tackle the deficiencies in data collection.
“We would have to set up a high-powered committee. First, to look at what went wrong with the data, and to clean up the data collecting and data interpreting process,” he said.
There have been questions for many years about whether government statistics were telling the full story but two recent controversies over revisions and delays of crucial numbers have taken those concerns to new heights.
Up to 36% of companies in the database used in GDP calculations could not be traced or were wrongly classified, according to a statistics ministry study released earlier in May for the 12 months to June 2017.
But the ministry said there was no impact on GDP estimates as due care was taken to adjust corporate filings at the aggregate level.
Economists have also raised concerns about the government’s move in 2015 to change the base year of GDP calculation to 2011/2012 from 2004/2005, which was used by the government to attack Congress.
More eyebrows were raised when the government revised GDP growth for 2016/2017 — the year Prime Minister Narendra Modi banned 87% of high-value bank notes in a big jolt to the cash-dependent economy — to 8.2% from 6.7%.
As a result, economists and investors say they are using fast-moving indicators such as car sales, air and rail cargo shipments, purchasing managers’ index data, and in-house proprietary indices to track Asia’s third-largest economy.
The government has acknowledged there are deficiencies in its data collection, but adds there has been no effect on GDP estimates.
The National Statistical Commission, a government-funded advisory body that checks the quality of official data, should have complete autonomy to improve data standards, said current and former commission members.
Selecting the right people for the job was also important, said Chidamabaram, a potential candidate for finance minister if Congress wins the election.
“I don’t think legal backing will make a difference,” he said. “What is important is the kind of people who are put there, and the kind of independence that they are given.”
India’s seven-phase general election began on April 11 and will end on May 19. Votes will be counted on May 23.
Modi entered the election as the front-runner, but opposition parties, including Congress, sense a chance to band together to try and oust the governing Bharatiya Janata Party.