The recent estimates by the Central Statistical Organisation (CSO), on both the Index of Industrial Production (IIP) and gross domestic product (GDP), show a slowdown; by how much, remains a matter of conjecture. For CSO has not only come up with the latest quarterly estimates, but it has also changed the estimates for the corresponding quarter of the previous year. While doing so, it has strangely not released the revised data of the intervening quarters. And the fact that IIP continues to vary widely, and is subject to sharp corrections, is well known. For analysts, the latest data are without a comparable historical perspective, and therefore of limited use.
To put matters in perspective, the government has released a new series for IIP which is supposedly an improved version of the past, and accordingly has updated the GDP estimates of the past apart from bringing out the latest estimates. As the new data show, for most sectors the growth in the past was significantly lower than people had been led to believe. In sectors such as capital goods, the difference between the old and new series of data is as much as 15 percentage points, and in manufacturing greater than seven percentage points. Even more strange, only the numbers for the first quarter (Q1 of the financial year) have been released. The result is no one knows what happened in Q2, Q3, and Q4 of the years gone by! It is hard to fathom why a government would release only Q1 data for three years, and leave out all other quarters. Even for those used to the sorry state of Indian statistics, the latest data release marks a new low. Giving out data in bits and pieces, frequently changing historical data, with large volatility in the advanced and provisional estimates of the same time period, all reveal a lack of competence or level of irresponsibility that should be unacceptable.
The practice of estimating economic activity is a much evolved science and there are many experts within the government who have the ability to do what is required. Collecting information may be difficult, but this is not a problem that has occurred for the first time. There are many sources of information that can be used to better understand the latest levels of economic activity. The government is currently not using data that it collects by way of tax collections, submissions to the registrar of companies, provident fund submissions, etc. It should not take much effort or resources to start using the information that the various departments of government already have at their disposal. Moreover, there are many new tools that are available, and old ones that are now much more accessible owing to the revolution in information technology.
That the statistics and economics fraternity refuses to build on the past reveals an inertia that is distressing. What is worse is that even the established practices of the past are being done away with. For all one knows, the day may not be far off when Indian government statistics are comparable for their lack of quality and reliability to those put out by China.