From the Viewsroom

A crisis of data credibility

Venky Vembu | Updated on November 18, 2019

Burying unflattering data is fraught with perils for the economy

The NDA government’s decision, announced on Friday, not to release the consumer expenditure survey results of 2017-18 citing “data quality issues” is only the latest such instance of its attempt to sweep unflattering datasets under the carpet. Leaked accounts of a draft copy of the survey results, published in a section of the media a day earlier, had established that consumer spending fell in real terms in 2017-18 for the first time in more than four decades. That fall was driven in large part by a slump in demand in rural areas, where — more disquietingly — even expenditure on food items had been scaled back. Those findings tie in with other indicators that point to a demand contraction in the economy, and particularly in rural India, as a consequence of widespread agrarian distress.

In defence of its action to withhold the survey results, the government claims it detected “deficiencies” in the report, which had then been referred to a committee. Further examination of the survey results pointed to a “significant increase in the divergence” in consumption pattern levels and even in the direction of the change, it claimed. Evidently, the committee that investigated these data anomalies recommended a refinement in the survey methodology to improve the data quality.

Even given the challenges of securing authentic data and analysing them to make sense of the larger economy, it is hard to miss the pattern in this government’s repeated attempts to bury datasets that paint a harsh picture of its handling of the economy. Indicatively, earlier this year, after leaked official data established that the unemployment rate was at a 45-year high, the government had debunked the National Sample Survey Office Survey report on which the finding was based. Today, official Indian data — even on headline measures of the GDP — faces a crisis of credibility; international agencies routinely express skepticism about them. For the government to routinely discard diagnostic reports that point to an economy in ill health is dangerous: it could lead to erroneous treatment protocols that imperil the sick patient.

The writer is Associate Editor with BusinessLine

Published on November 18, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like