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| Muddling GDP numbers | | | Omkar Dattatray | 12/11/2018 10:51:50 PM |
| It is the irony of this country that each and every thing is politicized for political expediency and vote bank. Issues and even non-issues are politicized. The politicization of every issue has become modern epithet in current political terminology of the country. Economy should not be politicized but currently economic figures and facts are becoming subject of political debate and discourse of the country, thanks to election time tussle and spat on GDP back series. It has become a subject of political maneuvering and machinations due to the power opium and greed of political parties without any exception.
The way GDP numbers were doctored by the NDA government to give a rosy picture of its economic performance has made the revised GDP revelations confused one and this confusion needs to be removed and cleared.
The current dichotomy about GDP numbers has assumed the potential of a potent political tool in the hands of both the BJP led NDA and the opposition congress just to catch votes in the current elections of the state assemblies and the ensuing general election in the beginning of new year. Economy should be given some sort of freedom to operate and adjust itself to the changing needs and the situations of the time and it should have freedom to perform and better the lot of the people. Though economics and politics is closely related but political economy should not be made a subject of murkier politics and should not be muddled and put on confused state as is happening these days over the GDP data released by central statistical organization (CSO). The economic data of GDP back series should not be muddled and made a subject of pure politics only. Both ruling NDA and the Congress is locked in an unwanted and undesirable spat over GDP back series and this is very alarming indeed. GDP back series is nothing but the political reflection of NDA and an unfortunate controversy has incubated with the disclosure by SCO about GDP figures. The economic data and GDP numbers should be formulated and interpreted correctly and unbiasedely and should not be colored and muddled in murkier political waters as is happening currently, thanks to the disclosure of GDP back series numbers. Gross domestic product which is abbreviated as GDP is the indicator of the economic health of the country and reflects the growth of the economy and it is a matter of grave concern that GDP numbers are being given political color before elections in order to cultivate vote bank and deceive gullible electorate in the run up to the general elections of 2019.
All political parties should desist from murkier politics of muddling GDP figures. Economy is in slump due to wrong policies of the NDA government and its much talked about demonetization and GST as alleged by congress and other opposition parties but there is some truth about it. According to former Finance Minister P. Chidambaram, Growth rate has declined due to wrong policies of NDA government. Demonetization and GST has given great shock and blow to the economy and it is still recovering from the jerks it has suffered. Back to GDP row, BJP led NDA and opposition parties are fighting over a set of numbers which is not just economic data but has the potential to be used as a weapon in the Lok Sabha elections of 2019. Government issued revised GDP data for the fiscal year 2005 to 2012 that lowered growth under the Congress led UPA government in contrast with the recalculated numbers that had been released in August, 2018. Opposition parties have criticized the GDP revision of methodology carried out in August, 2018.
The August calibration had given numbers about GDP showing UPA government doing better than present NDA government. The August numbers about GDP were calculated by Sudipto Mundale Committee set up by NSO. The recalculation showed bumped growth in UPA years based on the so called production shift methods.
This exercise of August, 2018 showed faster growth in the fiscal year 2004 to fiscal year 2012 and lower before that in 1994-95. It is this disclosure which triggered war of words between BJP and Congress with congress claiming that India did better under UPA government. It is because of this that Congress is criticizing the new numbers. In this connection P. Chidambaram has said, "In its desperate attempt to rewrite GDP data, the government resembles the student who cannot passed an examination without cheating." He further said that the revised GDP numbers were a "bad joke".
Government defended its position and said that August numbers which had bumped growth during UPA days were not actual but experimental and these numbers were not official estimates. Government further says that back series GDP numbers were the result of CSO officials who have recalibrated the growth figure and that these figures are thoroughly vetted by economic experts before being made public. Government contends that the organization which revised the GDP data-CSO is a highly credible agency and maintains arms distance from finance ministry. Arun jaitely said that," UPA has welcomed CSO decision when it revised fiscal year 2013 and fiscal year 2014 GDP growth upwards.
The same yardstick has been applied by CSO while revising growth downwards." The congress and other opposition parties are criticizing the methodology of recalculation and confused revised data of back series GDP. Even former Chief statistician Pranab sen has questioned the involvement of NITI AAYOG, " involving NITI in GDP is strange, it gives out signals that CSO lacks capability while AAYOG has all intellectual prowess."
On its part NITI AAYOG vice chairman has said that the figures of CSO are correct. Congress was euphoric about GDP back series data calculated in August, 2018 by the Sudipto Mundale Committee which congress said conclusively proved that UPA government had done better than current NDA government but the final numbers released by SCO Show the opposite. In fact, now the revised GDP data will definitely become a political tool for the BJP which claims it has performed better on economic front than previous UPA government and thus starts politicking on the GDP numbers and its opposition by Congress is understandable. The question arises what is GDP back series and why base year is changed. The answer is after base year is changed the GDP in previous years is revised according to the new base year for a fair comparison.
The back series that government released adjusts GDP numbers to fiscal year 2005-12 using new methodology with fiscal year 2012 as base. Whatever it is there should no politicking on the crucial GDP numbers and the much significant economic parameters should not be tinkered with and they should not be muddled either which is happening in our country.
There should not no window dressing and confusion so far as the GDP back series is concerned. It cannot alter the ground economic reality of the country.
Let the political parties take political economy seriously and desist from muddling and tinkering the GDP numbers to suit their vote bank politics.
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