The writer is Contributing Editor at The Indian Express, and Consulting Editor at Network 18
Misuse of economic data
Since the overwhelming Congress loss in the 2014 election, the misuse of statistics appears to be politically motivated.
I have often wondered as to how much the debate in India would have been different if the Congress had not lost the 2014 election so overwhelmingly. A decline of 162 seats — from 206 to 44 — was the second-largest in Indian history. The largest Congress defeat was a decline of 218 seats in 1989, after an assassination-boosted 1984 victory, and 2014 is tied with the Emergency decline of 163 seats.
But 2014 was especially devastating — it reduced the Congress to 11 seats short of even being called a major opposition party. The “intended consequence” of this defeat — all data began to be questioned. It was as early as January 2015, less than eight months after the installation of the new regime, when the revised GDP data were released. Senior and seasoned commentators and experts began to question the “rightness” of the data.
They began to question the downgrading of GDP growth for the last three years of the UPA-II regime — that in real terms GDP growth for the UPA years was lowered by a cumulative 2 percentage points (ppt). That is 0.7 ppt a year. Greater than this magnitude of error has been serially (continuously) committed by experts at the RBI/MPC in their three-month-ahead inflation forecasts. As is well known, there is an inverse one-to-one correspondence between real growth and inflation estimates.
So, the error being questioned by the CSO is of a lower order of magnitude than that by the experts at the RBI (which, incidentally, also questioned the GDP growth data when they were first released).
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