I n the last five years, we were often told by the Government that we were the fastest growing economy in the world. And yet very recently, the Chief Economic Adviser of those times, Mr Arvind Subramanian, has informed us that our economic performance was not mind-boggling but middling at the best. His statement has triggered a debate with many defending the Government statistics and an equal number saying triumphantly, “I told you so” with the general public not knowing whom to believe. In fact, the everchanging economic statistics being bandied about give one the feeling of having strayed in Alice’s Wonderland; nothing is what it appears to be and the shape and size of all things is variable.

There was high drama in January 2019 when the Periodic Labour Force Survey (PLFS) for 2017-18, showing an unemployment rate of 6.1 per cent, the highest in 45 years, was leaked. The Government rubbished the report terming it as a draft and appointed a committee to vet the same. This led to the resignation of the president and a Member of the National Statistical Commission. A set of eminent statisticians jumped into the fray, vehemently defending their colleagues and their findings. Next day, a set of equally reputed Chartered Accountants, branded the statisticians as putative deshdrohis and completely off the mark so far as their conclusions regarding unemployment were concerned. The public spectacle did not end here. Before and during the Lok Sabha elections, the official line was that Uber, Ola, NHAI etc. had created employment on a large scale and 5.4 crore people had availed MUDRA loans with which the problem of unemployment stood solved. Recently, without fanfare, the Government has accepted the very same figures that it was at pains to disprove. Then, there is the matter of budgetary deficit. The Revised Estimates (RE) of the Interim Budget projected a deficit at 3.4 per cent and the final figures released by the Government put the deficit at 3.39 per cent despite GST and VAT collection missing the target by more than Rs 93,000 crore and Income-tax collections falling short by about Rs. 75,000 crore, which in aggregate, translated to a shortfall of 11.3 per cent against the Revised Estimates. What was not mentioned was that expenditure of Rs.1.40 lakh crore had been financed by Extra-Budgetary Resources (EBR ~ borrowings by PSUs like FCI, HUDCO and REC from National Small Savings Fund. Also, expenditure of Rs 1.45 lakh crore was postponed to the next fiscal year. If we take these two figures into account the budgetary deficit would cross 4 per cent.

More such instances of dubious accounting can be recounted. Such practices are not uncommon in the business world with many seths maintaining three sets of account books ~ one for themselves, one for their partners, and the third set for the Income-tax people. The question before us is: “Does such behaviour behove a Government which has Satyamev Jayate as its motto?”

The disadvantages of adopting a less than honest approach are many. First, not everyone is fooled by doctored statistics, at least not the intelligent ones. In a well-publicised interview in March 2019, Raghuram Rajan, who has emerged as a sort of bête-noir of the Government, said: “I think what we need is a revamp to figure out what is true growth rate is. I know one minister has said how can we be growing at 7 per cent and not have jobs. Well, one possibility is that we are not growing at 7 per cent.” Earlier too, in view of the fact that a 7 per cent growth rate was not creating enough jobs, some economists had conjectured that a 20 per cent growth rate (which is practically impossible to achieve) was required to get over the unemployment problem.

The exercise to inflate GDP growth figures was highly unconvincing. In 2015, the new Government changed the base year for calculating GDP, which showed healthy GDP growth in UPA years. In August 2018, data given by the National Statistical Commission showed that India’s economy grew by over 10 per cent for at least one year under the previous Congressled government. However, this data was soon removed from the Government website. In November 2018 the Central Statistics Office (CSO) lowered the GDP growth for the previous UPA Government by recalibrating national accounts. Figures were again revised in January 2019 which hiked the growth rate of 2017-18 from 6.8 per cent to 7.2 per cent. These frequent revisions are sufficient to cast doubts on the process of compiling Government statistics. It would be futile to think that foreign Governments and organisations, with their deep pockets and expertise would not have figured out the real state of affairs.

A more immediate danger of purveying wrong statistics is that other Government agencies would rely on these statistics, weakening the planning process. For example, to control inflation, RBI would tighten money supply if GDP was galloping; but if GDP growth was not robust then tightening money supply might lead to deflation.

The recent past has witnessed a number of high-profile exits of internationally renowned experts from the Finance department with Raghuram Rajan, Arvind Panagariya and Arvind Subramanian being three prominent examples. Whether unprofessional working conditions had any connection with these exits can only be a matter for speculation. Mr Rajan summed up the problem in the following words: “Given that kind of anxiety, it is important, just to convey to the world, that we are not manipulating anything… this is our data, to actually have an independent group look into it and certify that our data indeed is fine or suggest the changes needed.” For a solution he suggested: “We need to take a fairly clean, independent look at our statistics process. What I would think might be useful is to get a panel of independent experts to go through that and think very carefully about the processes we follow.”

The solution suggested by Mr. Rajan is not workable. No Government would agree to independent experts going on a fact-finding mission that may lead to embarrassing conclusions. It is for the press and public to convince the Government that with the elections being over, no purpose will be served by persisting with doubtful statistics and the Government’s interests will be better served if the real picture is made available to all concerned.

The new Government has made a good beginning by turning its back on dubious statistics and officially endorsing the unflattering unemployment figures and marking down the GDP for the January-March quarter. One only hopes that this trend will continue.

Mark Twain once said: “Facts are stubborn things, but statistics are pliable.” For most of us, if we have better governance, we would not care about what species of statistics are dished out to us.