MUMBAI: India's benchmark index Sensex closed on Friday, clocking fifth straight day of advances, reclaiming the 38,000 mark. The sudden surge in equity market buoyancy is attributed to the foreign portfolio inflows that has turned positive with a net inflow of over Rs 17,000 crore this week. Is this exuberance justified, or are the investors missing the real story of India’s growth? That question has become relevant, with 108 eminent economists and social scientists from India and around the world raising doubts about Indian data and the recent meddling and politicising of the vital data related to India’s growth and employment.
“If the economic data is seen as not trustworthy for true & fair reflection, it’s impossible for investors to play India risk, let alone the difficulty for management of economic, fiscal and monetary policies,” said Moses Harding, veteran forex and market strategist. But, that is the data that is now suspect as pointed out by the letter the economists had signed and shared on Thursday.
“Lately, the Indian statistics and the institutions associated with it have however come under a cloud for being influenced and indeed even controlled by political considerations,” the letter said. When the introduction of a new series of GDP data in 2015 with a revised base year showing faster growth was questioned by many economists. “These revised estimates were surprising as they did not square with related macro-aggregates,” the letter pointed out.
The revised GDP growth rate for 2016-17 at 8.2 per cent, the highest in the decade, raised more questions as it was the year of demonetisation. The data was out of sync with what many economists had estimated. The other data that has turned even more controversial is the NSSO report on employment, which even led to two of the members quitting in revolt for the delay in publishing it. “There have since been news reports that the PLFS (Periodic Labour Force) of 2017-18 will be scrapped altogether by the Government.
In fact, any statistics that cast an iota of doubt on the achievement of the government seem to get revised or suppressed on the basis of some questionable methodology,” the appeal from the economists said. Problems with data collection methods have been an issue which even the central bank had acknowledged many times in the past, but so far, India’s data has not become suspect the way say the Chinese data.
That is the appeal now from the 108 economists, “to restore access and integrity to public statistics, and re-establish institutional independence and integrity to the statistical organisations”. “The national and global reputation of India’s statistical bodies is at stake. More than that, statistical integrity is crucial for generating data that would feed into economic policy-making and that would make for honest and democratic public discourse,” they said.