Opinion Who is accountable?

So we got to know that wrong deflators had been used for GDP at market prices and actual real GDP growth was 10.02%,not 3.65%.

New DelhiSeptember 9, 2010 10:31 AM IST First published on: Sep 9, 2010 at 10:31 AM IST

The uproar over GDP numbers has died down. A corrigendum was issued on 1 September 2010,with the obtuse-sounding,Inadvertently,there have been use of inappropriate deflators in converting GDP in current prices to GDP in constant prices. For those unaware of nitty-gritty details,CSO released Q1 (2010-11) estimates of GDP growth on 31 August 2010. According to this,GDP at factor cost (essentially supply) grew at 8.8%.

However,GDP at market prices (essentially demand) grew at 3.65%. Since these are two different methods of computing GDP and since the two different methods use different deflators to convert nominal GDP to real GDP,differences are possible. But a difference of this magnitude,between 8.8% and 3.65%?

So we got to know that wrong deflators had been used for GDP at market prices and actual real GDP growth was 10.02%,not 3.65%. In fairness,the government corrected itself within a day and it therefore seems as if all is well.

But all cannot be well. Why was such a number released in the first place? Anyone with any sense about the Indian economy will know that a real growth of 3.65% is impossible.

The Ministry of Statistics and Programme Implementation is the nodal Ministry,but this stuff really comes from CSO (Central Statistical Organization).

CSOs website tells us,The CSO is headed by the Director-General who is assisted by 2 Additional Director-Generals and 4 Deputy Director-Generals,Directors & Joint Directors and other supporting staff.

Very impressive and most of these people are presumably from Indian Statistical Service (ISS). Plus,there is the Chief Statistician,through whom these numbers must also pass. It seems to me extremely odd that none of these people noticed 3.65% couldnt possibly be right and failed to double check. Since we know it has happened,one cant have much faith in the quality of Indias statistical system. Actually,a Rangarajan Statistical Commission report in 2001 did demolish our faith in Indias statistics.

But this recent faux pas has now demolished our faith in the quality of our senior statistical personnel. A simple corrigendum doesnt solve the problem,not until we know who was responsible and what action has been taken. This is a country that,at least among developing countries,prided itself on the quality of its statistics.

Once upon a time,there was a P C Mahalanobis and his birthday (29 June) is still celebrated as National Statistics Day.