108 economists and social scientists question govt's motives in open letter

What: A group of economists and social scientists — 108, to be precise — wrote an open letter on March 14 asking whether the central government was trying to undermine statistical organisations. Signatories include academics such as Amiya Bagchi (Institute of Development Studies Kolkata), Pranab Bardhan (University of California at Berkeley), Jean Drèze (Allahabad University) and C Rammanohar Reddy (The India Forum), among others.

In this letter, the economists raised doubts about the revision of the base year for Gross Domestic Product (GDP) calculations from 2004-05 to 2011-2012. This alone, they wrote, increased India’s growth rate by 1.1 per cent in 2016-2017, the year the Narendra Modi-led government announced the demonetisation of Rs 500 and Rs 1,000 currency notes. Their second grievance was regarding the National Sample Survey Organisation (NSSO) data on unemployment, which the central government has allegedly tried to suppress because it is “unfavourable”.

Responding to this letter, 131 chartered accountants wrote one of their own, accusing the economists and social scientists of being agenda-driven. The letter, written on March 18, was signed by T V Mohandas Pai (chairman, Manipal Global), Nilesh Shah (managing director, Kotak Mahindra AMC), Vikas Khemani (former CEO, Edelweiss) and several members of the Institute of Chartered Accountants of India.

Why: The economists wrote that this intervention was necessary to preserve the autonomy of statistical institutions. In their letter, they wrote, “It is… imperative that the agencies associated with collection and dissemination of statistics like Central Statistical Office (CSO) and NSSO are not subject to political interference and their work, therefore, enjoys total credibility. For these reasons, globally, such institutions are usually bestowed with professional autonomy.”

The 131 chartered accountants believe that such concerns are motivated and “devious”. Titled “Rising above the noise of motivated voices: 131 chartered accountants debunk the politically motivated baseless allegations of some economists and social scientists”, this rejoinder largely focuses on how such allegations against the Indian government will only harm the country’s growth prospects in the long run. For instance, the signatories worry that the questions raised by the economists will create an atmosphere of uncertainty in the minds of investors. “Now when India has become the Fastest Growing Economy in the world they are worried about the credibility of data. Is it their intention to scare foreign investors by creating doubts on the credibility of data?” they ask.

A large number of the 131 signatories are financial advisors and wealth managers — professionals who depend on being able to predict market forces to create wealth. A positive outlook for the Indian economy, especially one that is growth driven, seems essential to their work.

How: The first letter, signed by the 108 economists, uses social and economic metrics to present a data-driven argument. For instance, while countering the revision of the base GDP calculation year to 2011-2012, the letter states that the resultant figures do not match other macro-economic data. For the 131 chartered accountants, who also call themselves “CAs for Nation”, this is an exercise in whataboutery, questioning the media and the opposition, and the economists for siding with the two. They ask why these economists didn’t mention that the base year for GDP calculations is often revisited, but did not counter any allegations about what it meant for the economy in this specific case. This CAs’ letter also does not address the grave issue of high-profile resignations from the statistical institutions.

Where: An intellectual battle is being fought through these letters, largely on social media. Television news debates have also found enough fodder for interesting conversations. But unlike the Amartya Sen-Jagdish Bhagwati debate nearly six years ago, debates today often tend to veer off the academic path and slip into mudslinging, especially during election season.