Lack of reliable data affects diagnosis of the economy and the consequent policy response, said former Chief Economic Advisor (CEA) Arvind Subramanian at ‘Interrogating Numbers’, an event organised by Reading Hub — a forum for books and ideas set up with Dravidian Professionals Forum and Roja Muthiah Research Library.

He cited the instance of how the official rate of economic growth was higher than the actual rate of growth when he was the CEA and this prevented the government from adopting a more supportive fiscal and monetary policy.

Delayed reforms

What was needed then, Subramanian said, was a more expansionary policy but patchy data that threw up a strong 7.5 per cent GDP growth affected the policy response.

He also said the higher rate of growth also delayed the much-needed reforms, especially in dealing with the twin balance sheet problem that the economy was facing. Government officials postponed any action on the grounds that there was no need for it as the economy was doing well.

‘Economical with truth’

Subramanian also gave the example of lower mortality data during the first wave of Covid. Deaths then were much higher than what was announced.

This gave the people a sense of complacency in January and February this year. Had we had a better data, people would have been much more on guard when the brutal second wave hit, he said..

He said that governments around the world are economical with the truth and it is an ongoing battle to expose it by corroborating data from every possible sources. It is a battle that never ends, added Subramanian. Intermediaries like journalists, academics play an important role in this battle.

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