Tue, Dec 04, 2018 - Page 6 News List

ANALYSIS: Politicians spar over statistics on India’s economy

Reuters, NEW DELHI

It might be the world’s sixth-largest, but most other things about India’s economy are up for debate.

The ruling Bharatiya Janata Party (BJP) is under fire for the release of new historical GDP figures that significantly downgraded growth during the years the opposition Congress party was in power, replacing old government estimates and those prepared by an independent committee.

The figures, released by the Central Statistics Office (CSO), showed growth in the 10 years of Congress rule to 2014 averaged 6.7 percent, below an average of 7.4 percent under the current government.

A previous government estimate had growth under Congress at 7.8 percent.

P. Chidambaram, a former Indian minister of finance under the Congress government, called the release “a joke.”

Indian Minister of Finance Arun Jaitley of the BJP said the CSO was a credible organization.

The fallout comes at a critical time for Indian Prime Minister Narendra Modi.

India’s economy grew a weaker-than-expected 7.1 percent in the July-September quarter, from a more than two-year high of 8.2 percent in the previous quarter, government data showed on Friday.

Modi faces a general election next year, when the performance of the economy under his pro-business administration compared with the Congress era is likely to dominate campaigning.

The spat has also alarmed India’s top statisticians, who have long faced the difficult task of estimating growth and unemployment in an economy with hundreds of millions of informal workers, and dominated its financial press and political cartoons in recent days.

“The entire episode threatens to bring disrepute to India’s statistical services,” said an editorial in Mint, one of the country’s leading business newspapers, on Friday.

A joke widely circulated on WhatsApp said the government would soon be reinterpreting the last cricket World Cup, in which India crashed out in the semi-finals, to say the country won based on a new methodology.

India lacks an independent statistical body. An organization called the National Statistics Commission (NSC) was formed in 2005 with that intention, though it is yet to be recognized as the official body for generating statistics.

Last year the NSC set up a committee, chaired by economist Sudipto Mundle, to come up with a new set of historical GDP figures.

Its report, published in July, showed growth averaged 8.1 percent in the decade before the BJP took power.

After the figures were cheered by the Congress, the government issued a clarification saying the report “had not yet been finalized and various alternative methods are being explored.”

Shortly after, the report was pulled from the government’s Web site.

“The whole thing has unfortunately become very political,” Mundle said. “It is very troubling.”

Attempts to formalize the NSC’s role have been successively stonewalled by Congress and the BJP, said N R Bhanumurthy, who sat on the committee chaired by Mundle.

“They have not shown much interest in making it independent from our government,” he said.

The debate over India’s true level of growth is the latest to frustrate economists looking to measure the performance of the country of 1.3 billion people.

India has not published its official employment survey since 2015, while a smaller quarterly survey on companies employing more than 10 workers has not been released since March.

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