The Ministry of Commerce and Industry is, curiously, revising the year-old steel output data in the index of eight core industries, without saying why.
The index of eight core industries released for January 2012 shows the March 2011 steel output growth at 10.9 per cent. A month later, that has scaled down by a major 5.5 percentage points— to 5.4 per cent. The latest (March) data pegs it at 12 per cent.
Steel has a 6.8 per cent weight in the index of industrial production (IIP). The fluctuations in this revision are also seen in the index of eight core numbers for March 2011, revised from 6.5 per cent in January 2012 to 5.2 per cent in February, and then back to 6.3 per cent in March. The upward revision of the base for the March 2012 numbers may mute the IIP for the last month of 2011-12. The index of eight core industries (bearing a 38 per cent weight in IIP) saw the growth decline to 2 per cent in March 2012.
| SEASON OF DATA ERRORS? Steel output growth (%) | |||
| January release | February release | March release | |
| Feb ‘11 | 12.1 | 18.5 | NA |
| Mar ‘11 | 10.9 | 5.4 | 12.0 |
| Apr ‘11 | 5.3 | 5.3 | 2.9 |
| May ‘11 | 7.7 | 7.7 | 8.0 |
| Jun ‘11 | 14.5 | 14.5 | 14.5 |
| Jul ‘11 | 15.5 | 15.5 | 16.5 |
| Aug ‘11 | 8.0 | 8.0 | 7.9 |
| Sep ‘11 | 6.6 | 6.6 | 7.5 |
| Oct ‘11 | 3.8 | 3.8 | 4.2 |
| Nov ‘11 | 5.1 | 5.1 | 10.5 |
| Dec ‘11 | 8.7 | 8.7 | 10.2 |
| Jan ‘12 | -2.9 | -2.9 | -2.8 |
| Feb ‘12 | 4.3 | 4.3 | 4.7 |
| Source: Ministry of Commerce and Industry | |||
The steel output growth, too, was revised — upwards for February 2011 from 12.1 per cent in the release for the January 2012 core sector data to 18.5 per cent in the press statement for February 2012 data. The latest release does not carry the February data. “This is strange,” notes Anis Chakravarty of Deloitte Touche Tohmatsu.
“This is strange, as normally, revisions happen only for the past 2-3 months of data. But this revision goes back to a year and that too fluctuations in that. Ministry of Commerce and Industry must explain this”, said Anis Chakravarty, senior director, Deloitte Touche Tohmatsu.
It is interesting to see that in the latest release of the output of eight core sector saw revision in data for at least 10 months of 2011-12. It was due to steel output growth being revised. For April 2011, the steel output was revised from 5.3 per cent to 2.9 per cent. For November 2011, the revision was a major one as it got revised from 5.1 per cent to double digit growth of 10.5 per cent.
Data discrepancy like affects the policy-making procedure, said Chakravarty. .
Soumya Kanti Ghosh, FICCI chief economist told Business Standard that for the past year or so, the iron and steel exports were growing at 30 per cent plus rate, however, the production numbers were not in sync. “Now that the numbers have been revised upwards, it is a little easier to interpret the major increase in iron and steel exports during the year”, he added.
“This can be seen as an after-effect of the sugar data misreporting in IIP for January that all the numbers are being revised now”, said Ghosh. There is no real recovery in the core industry, he added.
Sugar production was wrongly reported at 13.41 million tonnes in place of the actual figure of 5.81 million tonnes in January 2012, that led to January IIP number inflate to 6.8 per cent against the actual growth of just 1.1 per cent.
Ministry of Commerce and Industry officials were not available for comment.