India’s top statistician admitted yesterday the country’s economic data are “imperfect” but defended GDP figures against accusations they vastly overstate the performance of the supposedly booming economy.
The South Asian nation unveiled another set of world-beating figures on Tuesday, showing GDP (gross domestic product) grew nearly 8% in the most recent quarter, much faster than any other major economy.
But the figures have puzzled many economists who find the numbers hard to square with other indicators such as industrial output or private investment that show far more sluggish activity on the ground. “The fact is, imperfect information is still useful as long as I know what the sources of the imperfection are,” TCA Anant, chief statistician of India, told reporters in New Delhi.
“The question is, would you rather walk with your eyes shut or with a pair of spectacles which are very dirty? The answer is often that you would wear spectacles which are dirty.”
Concerns over India’s rosy GDP data have been simmering since the government in January 2015 revised the base year to 2011-12 and introduced new ways of calculating growth that it said were closer to international standards.
One vocal critic, Shilan Shah at Capital Economics, says the numbers should be taken “with a pinch of salt” while an HSBC analysis yesterday was headlined “Grounded in reality?”
Anant said the new series is more accurate because it brings in much more information, in particular from the corporate sector, including data from 500,000 companies compared with 2,500 firms earlier.
Yet the statistics chief acknowledged the difficulty of obtaining accurate measurements in a country where about 90% of the workforce is employed in the informal sector – as roadside barbers or rag-pickers, for example.
Without formal documents such as contracts or tax filings, the government is forced to rely on productivity surveys typically carried out only once every four to five years.
“In spite of all these improvements, GDP computation in India is principally constrained with the availability of data,” Anant said.
“We are a developing economy, we do not have the sort of complete data pertaining to all sectors of the country available in a developed economy,” he said.