oppn parties Economic Data Should Not Be Window Dressed

News Snippets

  • For the first time in history, Darjeeling loses first flush tea due to suspension of garden work for Covid-19 outbreak
  • Supreme Court asks journalists to be responsible and publish only the official version of news after it was brought to its notice that migrant exodus started after the 'fake' news that the lockdown will be extended to three months
  • Small saving rates slashed by the government by 140 basis points
  • The Centre says that the exodus of the migrants was stopped to save villages and prevent community transmission
  • The Centre says March 31 will remain the closing date for FY 2019-2020 and no change will be made for Covid-19 disruption
  • Tablighi Jamaat fiasco puts several states on high alert, attendees and their contacts being traced
  • Stock markets recover on the last day of the financial year, but the sentiment remains weak
  • The government says Covid-19 is still in local transmission stage in India
  • Government scotches rumours of extending the lockdown beyond April14. Says no such plan
  • Centre asks states to give shelter and food to migrant workers to stop them from taking to the streets
  • RBI cuts repo rate by 75 bps, the steepest in 10 years
  • Centre writes to states regarding laxity in monitoring people who had arrived from abroad between January and March
  • Kerala reports a spurt in new cases
  • With 124 fresh cases on Friday, the number of reported cases in India stand at 854
  • Five of a family, including a 9-month-old-baby test positive for Covid-19 in Nadia district in West Bengal on Friday
Total count stands ar 3082 as India records 16 Covid-19 deaths, the highest in a single day
oppn parties
Economic Data Should Not Be Window Dressed

By Sunil Garodia
First publised on 2018-12-01 08:57:22

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
It needs to be recognized that modern economy – in fact, even society – is increasingly being driven by data. Hence, it is imperative that data collection, analysis and presentation are robust, timely and credible. Since the Indian economy is in the top six in the world and growing at a good rate, both domestic and international investors look to invest here and their decisions are largely based on sectoral data and related policy decisions of the government. The government also takes policy decisions based on economic data.

Hence, frequent tinkering with back data confuses economists and investors and is not good for generating inflow of funds in the economy or for formulating policy. The NDA government has shifted the base year for calculations from 2004-05 to 2011-12. While there is nothing intrinsically wrong in this as it brings data closer to current prices given that inflation skews the figures over time, the effects have triggered a political row. The new set of back data show that the growth rate during the first four years of UPA I & II was 6.7%, much lower than the earlier figure of 8.1% (with 2004-05 as base) and lower than the 7.4% achieved under NDA in the last four years (with 2011-12 as base).

Periodic updating of the base year is necessary and is done in all economies across the globe. It is not as if the UPA growth rate has been rubbished by the new set of data. Those who understand economics, statistics and data will always talk about growth rates as per the base year from which they are calculated. Hence, there is no need for political squabbling. But it also needs to be stressed that frequent tinkering with data, window dressing figures and presenting them in slanted way is not proper and should be avoided at all costs.