Figuring it out

The explanation of these data bloomers could lie with the highly inefficient methods used to collate numbers. Commerce and Industry Minister Anand Sharma is presiding over two sets of monthly data series,the trade data and the factory output data,both of which are evidently throwing up erratic numbers. Their combined impact would mean that Finance Minister P. Chidambaram and RBI Governor D. Subbarao may end up shooting in the dark when taking a call on the direction the economy must be given. For instance,the cumulative data on exports and imports for this fiscal shows that the trade balance has actually improved to $55.6 billion,an improvement of nearly 9 per cent from the last fiscal. This is in line with anecdotal evidence and estimates that India’s current account deficit will be lower this year compared with the massive 4.5 per cent of the last fiscal. Once Sharma’s ministry revises the numbers,however,all these calculations may have to be done afresh.

On a day when the inflation numbers are finally showing that the economy may be moving in the direction of cooling down and thus offering the RBI a chance to cut rates,the ambivalence on the trade data casts a shadow. This is not just about checking numbers. It has to do with the health of the economy.