Manufacturing contracting 4.3 per cent and agriculture growing 4.6 per cent year-on-year have been the two major surprises in the National Statistical Office’s (NSO) latest GDP estimates for July-September. The de-growth in manufacturing is in contrast to the S&P Global’s Purchasing Managers’ Index (PMI) data that shows the sector registering expansion not only during the quarter, but for 17 months in a row to November 2022. However, the PMI is based on a panel survey of just around 400 manufacturers. Also, the NSO’s estimates are of gross value added. In other words, the value of output minus value of inputs used in production. Most companies reported higher input costs during July-September, leading to compressed margins. That, to an extent, can probably explain the divergence between the NSO and PMI data as far as manufacturing goes.
The larger problem that needs addressing is credibility of data. Timely and reliable information on crop production is a necessary public good — for policymakers as much as farmers and agri-businesses. A country that sees itself as becoming a digital superpower should rely more on satellite imagery, remote-sensing vegetation indices and hand-held chlorophyll meters, as opposed to the traditional patwari-girdawari system, for estimating crop area and yields. The model here should be the US Department of Agriculture, which releases monthly reports providing crop-wise output, domestic consumption, export and import forecasts and updates. The costs of overestimation and underestimation of production aren’t small — which was clearly seen with last year’s wheat crop.
