ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Lies, Damn Lies and Statistics

The latest data on India's GDP raises more questions than provides answers.

The origin of this phrase is shrouded in mystery. American author Mark Twain popularised it and attributed it to British Prime Minister Benjamin Disraeli but the sentence, “There are three kinds of lies: lies, damn lies and statistics,” cannot be found in any of Disraeli’s works. In India too, what is put out by the government as figures of rates of growth of the country’s gross domestic product (GDP) has become rather mysterious and confusing. Prime Minister Narendra Modi and his cheerleaders have been shouting from the rooftops that this is the fastest-growing major economy in the world, something we are all supposed to be proud of. Truth be told, there are few who are euphoric about the current state of the Indian economy. What is worse is that analysts and commentators who have crunched the numbers put out by the Central Statistics Office (CSO) have raised doubts about their veracity. The rosy picture being sought to be portrayed by the government’s spin doctors may end up harming its own interests; reminiscent of how the “India Shining” campaign backfired on the Bharatiya Janata Party government led by Atal Behari Vajpayee in 2004.

The latest estimates of the CSO indicate that India’s GDP in the financial year that ended on 31 March 2016 stood at 7.6% (against 7.2% in 2015–16) with an unexpected surge of 7.9% in the January–March 2016 quarter. Of the GDP growth of 7.6% in 2015–16, as much as 2.4 percentage points were accounted for under the head “discrepancies” against 0.1 percentage points in the previous year. In other words, if one excludes the discrepancies, the rates of growth of GDP would be 7.1% in 2014–15 and 5.2% in 2015–16—nothing to get particularly excited about. Even if one concedes that discrepancies are inevitable while compiling national accounts, especially when new and ostensibly more “accurate” systems of statistics are being sought to be put in place, there are a number of crucial questions that remain unanswered.

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