Numbers speak the cold, hard truth. Unless, of course, you give them a nice and long political massage

During China’s massive growth years in the first decade of this millennium, statisticians and economists often expressed doubts about the figures released by the Chinese Government. Of course, there was first incredulous doubt about the high numbers but later on that doubt progressed to wondering if the numbers were high enough! Under Xi Jinping, though, China’s statistics have been seen as fairly reliable. Unfortunately in India, our numbers for economic growth and employment have been fairly confusing if not totally unreliable. One reason for that has been the inability of formal statistical models to account for the informal economy in India. But of late the problem has been a political one.

Politicians have always tried to massage statistics and growth figures to suit their narratives. That is par for the course. In most countries, the statisticians, though, have retained their integrity and released numbers that are on the whole pretty reliable. It appears, however, that the latest statistical exercise which has resulted in the numbers released for economic growth in India as part of the ‘new series’ of Gross Domestic Product (GDP) have become all about politics. The NITI Aayog Vice-Chairman Rajiv Kumar and former Finance Minister P Chidambaram are engaged in a war of words on social media site Twitter about the new numbers which showed that growth during the UPA 1 and UPA 2 administrations was not as high as previously claimed. Indian growth numbers have become inherently political and this is going to create a problem for foreign and domestic investors alike because numbers contrived by politicians will always make them look good, or at least better than their opponents, but do nothing to bolster confidence.

The fact is that in most democracies national statistics organisations are apolitical and the methodology used to calculate growth arrived after a consensus. In India, clearly the current regime is struggling to show growth in the aftermath of demonetisation and a flawed Goods and Services Tax implementation. The fact that the new series used to extrapolate GDP numbers of past years is inherently political is difficult to deny no matter how many blogs are written. Things have come to such a pass that the former Chief Economic Adviser Arvind Subramanian has launched a vitriolic attack on demonetisation although he defended it stoutly when he held the  position under the same regime. The politicisation of the Indian economy is now more or less complete.