At first glance, the just released industrial production (IIP) numbers show a sharp slowdown in the growth of manufacturing. Compared with the corresponding months last year, that is year-on-year, growth dropped from 15.1% in April to 11.9% in May. But the slowdown in manufacturing growth turns out to be not so bad once we note the Central Statistical Organization (CSO) has revised its indices downwards for this April to report a growth of 13.7%.
What is a concern is that revisions are no aberration. IIP data are known to gyrate unpredictably, making it a very unreliable measure of the country’s economic health. This was tolerable at a time when India was tethered to the Hindu rate of growth. Now times have changed radically and the country is drawing in nearly $20 billion in foreign direct investment. Robustness of data is, therefore, absolutely critical for investors as well as policy planners. Therefore, it is high time CSO set its house in order.