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Managing Math: The Crisis in India’s official statistics

June 11, 2018

 

The Central Government in India is playing with statistics to showcase achievements, with dire consequences.

 

‘‘Robust Job Creation in India: Not Fake News’’, thus reads an article by Surjit Bhalla, Member of Indian Prime Minister’s Economic Advisory Council. The article was indubitably, an attempt to assuage outrage surrounding the Prime Minister’s remarks that vendors of pakodas- an inexpensive evening snack- were employed. The outrage reflected disenchantment over job creation under Mr. Modi’s tenure, a promise that swept him to power in 2014.  

 

The article claimed 15mn jobs were created in India in 2017, contradicting the Labour Ministry, which reported a 65% decline in job creation between July-September 2017 alone. Economist Arun Kumar wrote that, in a slowing economy- owing to an overhaul of indirect taxes and demonetisation of bank notes- this was improbable. Mr. Bhalla’s figures came from the Employees’ Provident Fund Organisation- a retirement benefit comptroller. In 2016, the threshold for mandatory registration of employers was reduced from 20 to 10 employees. Incentives for those registered were enhanced, pushing up registrations. Substituting EPFO figures for those of the Labour Bureau allowed counting all registered employees as new- regardless of when they started working- inflating job creation.

 

This is not the first instance of statistical trickery under Mr. Modi’s tenure. Soon after taking office, his government modified the methodology for calculating GDP, increasing growth rates by about 100 basis points. Revised data for the previous government’s tenure was, however, never released. In similar vein, India’s central bank has withheld data concerning deposits in banks during the 2016 bank note demonetization. It is believed that the government expected that large sums of untaxed cash would never be deposited, for fear of prosecution, yielding a windfall in extinguished liabilities. Mr. P. Chidambaram, from the opposition Congress, contends that nefarious means were used to deposit cash. Experts add that lack of investigative machinery for approximately 310 million bank accounts is certain to allow large sums to remain unaccounted- claims which threaten Mr. Modi’s attempts at exploiting schadenfreude of the poor.

 

Former leaders of Mr. Modi’s Bharatiya Janta Party, claim that corporate leaders and officials privately chide government statistics as unreliable. Arun Shourie, a minister in the 1999 BJP government, claims Mr. Modi lives is in an echo chamber, devising policies by revelation, not vision. He argues that the government has convinced itself of its own performance and uses a pliant media to obscure public discourse, a fact that is worrisome.

 

He might well be right. The last few years have seen discussion wean away from tangible issues. The little discussion that does happen is riddled with whataboutery and obfuscation. This is dangerous for a country with a large young population seeking employment which is increasingly hard to find. At a time when the world is witnessing a technological revolution that will radically alter economies, India’s inability to educate and employ its youth will render it terribly unprepared. For a billion plus people, that would be disastrous.

About The Author

Prashant Khurana is a student of Law at the Faculty of Law, Delhi University. He holds a Bachelor’s degree in History from Hansraj College, Delhi University. Prashant is an accomplished debater, and an active participant and organiser of Model United Nations Conferences and was recently invited as a Chairperson at the University of Kent, United Kingdom for their MUN conference. He has appeared as a guest panellist on Headlines Today (presently, India Today) News Channel and has also interviewed personalities such as Mr. Mani Shankar Aiyar, Dr. Sambit Patra, the Ambassador of Canada to India, among others.

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