Modi regime proves a threat to official data

India has come a long way since the days when the founder of the Indian Statistical Institute (ISI), the legendary Prasantha Chandra Mahalanobis, was appointed honorary statistical adviser to the Cabinet for India’s first Prime Minister Jawaharlal Nehru. A Central Statistical Unit was set up in the Cabinet Secretariat in 1949 under his technical guidance.

In contrast, DJ Patil was appointed as the US’ first chief data scientist and deputy chief technology officer for data policy by Barack Obama as late as in 2015.

If newly independent India could set up a cutting edge statistical office with few parallels in the world at that time, it was because Nehru empowered professionals. In 1946, he sent Pitamber Pant, who acted as his secretary before independence, to learn statistics at the ISI. Pant later became the head of the Perspective Planning Division of the ISI housed within the Planning Commission.

Under Mahalanobis’ guidance came the Central Statistical Organisation (now called the Central Statistics Office), the National Sample Survey and the Annual Survey of Industries.

Over the decades, this statistical apparatus, despite periodic upgrades, failed to keep up with the requirements of an increasingly complex economy. Gaps in coverage, inconsistencies and lags in estimation have weakened it. A second push for reinvigoration was provided by Prime Minister Manmohan Singh when the Central Statistical Office was made completely independent. From 2007 onwards, India has also celebrated 29 June every year as ‘Statistics Day’ to mark Mahalanobis’ birthday.

Statistics changed, not released, or defy belief

More recent developments, however, have served to thwart those efforts. Controversies over two technical issues stand out in particular.

First, downward revisions were announced in the GDP growth rates for the previous Manmohan Singh-led Congress’ term as part of the official back-casting of the 2011-12 base series. Back-casting and base year updates are routine affairs that take place regularly. But the process was fraught this time around as comparable corporate data was not available for the years going back from 2011-12. And so, the back-casting relied on proxies. Trouble is, no eminent statistician has so far vetted the statistical robustness of the proxies used. And several are critical of the involvement of the NITI (National Institution for Transforming India) Aayog in the preparation and the release of the back-casted series.

The controversy sharpened when the government revised upwards the 2017-18 GDP growth estimate from 6.7% to 7.2% and 2016-17 GDP growth estimate from 7.1% to 8.2%. That made the demonetization year, 2016-17, the year of fastest GDP growth for Prime Minister Narendra Modi’s tenure. This for a year when nearly every sectoral association – from traders, consumer durables to cement manufacturers – reported sharp drops in sales on account of the note ban.

Again, the evidently logic-defying revisions were not the outcome of some off-the-cuff computation. Rather, they were routine revisions carried out as per the revisions calendar that – supposedly – take account of more updated and representative information.

A bigger controversy perhaps is the one involving jobs data. The National Sample Survey Office was made to discontinue the large labor force survey it does every five years on the grounds that it would be replaced by periodic labor force surveys. The report of the annual survey for 2017-18 that was duly cleared by the National Statistical Commission was ready. But the government refused to release the report, which found that unemployment reached a 45-year high in 2017-18, the demonetization year.

Similarly, the Labour Bureau’s findings on the sixth annual employment-unemployment survey, for the year 2016-17, have also not been released to date.

Survey’s jobs ‘boom’ wildly at odds with state data

At the same time, the government is quick to talk up any non-government report as long as its findings are flattering to its political narrative. One such report is a purported jobs survey undertaken by the Confederation of Indian Industry that found growth in the number of jobs of 13.9% over the last four years. It claimed that 332,394 new jobs were created in over 100,000 medium, small and micro enterprises (MSMEs) located in more than 350 industrial centers spread across 28 states.

Tamil Nadu in southern India was found to be among the states that created the most jobs in the survey — a claim that runs contrary to the actual data available from the state government. A government policy note tabled by the state’s MSME Department in the state assembly in June 2018 stated that the total number of registered MSME industrial units in Tamil Nadu had dipped by a significant 18.45% in 2017-18 from the previous year. In absolute numbers, as many as 267,310 MSMEs were registered in 2016-17; this figure fell to 217,981 during 2017-18.

About 49,329 industrial units had wound up operations in one year. The number of workers employed in MSMEs had fallen by over 500,000 during the same period. In 2016-17, the number stood at 1,897,619, but in 2017-18, it dwindled to 1,378,544.

Besides demonetization, a series of crises hit the MSME sector in Tamil Nadu – the Chennai floods of December 2015, when industrial units were marooned, and Cyclone Vardah. Entrepreneurs lost documents, stock, plant and machinery in the floods, in addition to incurring financial losses.

Call to insulate official statistics from political interference

By making use of the rushed CII survey in its official propaganda, the Modi-led Bharatiya Janata Party (BJP) has, as a result, suffered a blow to its credibility in regard to statistical integrity. This comes over and above the issues raised by 108 economists in their reminder on the need to insulate the official statistical system from political interference.

Their concerns over the statistical robustness of the official GDP and unemployment estimates were made public after the two remaining independent members, PC Mohanan and JV Meenakshi, stepped down from the National Statistical Commission. Both have expressed concerns over the handling of the GDP and unemployment estimates.

The government’s response has been limited to dismissing the controversies altogether and does not augur well for the health and credibility of the Indian statistical systems.

Keeping the statistical systems insulated from the pressures of electoral politics becomes a bigger imperative when official economic estimates seem to defy common sense and run contrary to comparable data generated by non-government agencies, especially when the country’s general elections are so close.