Entries of $12 billion 'missing' from trade data

The commerce ministry today said the discrepancy in merchandise trade data was on account of "missing entries" of nearly $12 billion during 2005-06.

In a white paper on the methodology for computation of the growth rate for exports and imports, the ministry said: "It has been found that a large number of missing entries (data sent from customs houses through their computer network) were not received by the Directorate General of Customs Intelligence and Statistics. The total magnitude of the missing entries is approximately $12 billion for 2005-06. By taking account of these missing entries, textile data could be reconciled to a great extent with the data of the United States and the European Union customs."

Making a case for the comparison of provisional trade data of the current year with the provisional trade data of the previous year, the paper added that comparing provisional data with the revised data of the previous year could lead to misleading results, especially if the extent of revisions was significant.

The commerce ministry, from the beginning of the current fiscal, had reverted to its earlier methodology of comparing provisional data with the provisional data of the previous year.

The paper pointed out that there was a wide fluctuation in the growth rate for exports when the basis of comparison was changed from provisional-to-provisional to provisional-to-provisionally revised or final.

"If the provisional figures of the current year are compared with the partially revised figures of last year, there is a deceleration in export growth, which goes contrary to the recent trends in exchange rate movements and manufacturing sector growth," the paper, which has been put in the public domain for comments, said.

It further stated that till such time the trade data series stabilised completely, it was appropriate to compute growth rates on a provisional-to-provisional basis, while at the same time providing the latest available provisionally revised figures of last year for transparency and comparison.