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Dodgy numbers, creaking system

Dodgy numbers, creaking system
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First Published: Tue, Oct 25 2011. 01 16 AM IST

Updated: Tue, Oct 25 2011. 01 16 AM IST
India’s exports have grown by an extraordinary rate in recent months, so say the statistics released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), the custodians of data on the country’s merchandise trade. During the first five months of this fiscal, exports have increased by more than 54% over the corresponding period of 2010-11. Within this period, two months stand out: in July, exports grew by nearly 82% compared with the same month in the previous year, while in May, the year-on-year increase reported was 57%. What makes the export performance during 2011-12 more impressive is that exports increased by 40% during 2010-11, making India one of the better performing economies during this period. As a result, total exports topped $250 billion during the year.
This export performance has come under some scrutiny largely because observers find it difficult to accept these numbers, more so as they were reported during a phase of poor global economic growth. But these doubts have now spanned beyond this year’s figures—critical comments have also been made regarding figures provided by DGCI&S that capture the previous year’s export performance. Lending credibility to these doubts is the nature of deviation that has been observed between the figures on merchandise trade for 2010-11 provided by DGCI&S and the Reserve Bank of India (RBI). The observed trend has been that the RBI data, which captures actual inflows of foreign exchange resulting from exports, has been somewhat higher than the figures provided by DGCI&S. This trend has been reversed in the export figures provided by the two agencies. The short point, therefore, is that there is a case for relooking at export figures provided by DGCI&S.
The glitches in the DGCI&S data system may be a minor aberration, but what is worrisome are the fault lines in India’s statistical system. Yawning gaps exist in the manner in which data and other information are reported—some of these are so critical that they would not allow even policymakers to take prompt decisions. Yet another issue that needs attention is that more current data sets may in fact be available with the government agencies, but are not put in the public domain.
Possibly the most stark example in this regard is the state of official statistics on the services sector. Data on the sector, which accounts for more than 50% of the country’s gross domestic product, is scanty, to say the very least. It is somewhat strange that the Central Statistics Office, which has been providing unit-level data for the manufacturing sector for several decades, has not felt the need to equip itself in order to make data on the services sector available in the public domain. In the absence of detailed industrywise data, major economic parameters cannot easily be analysed for this sector. Surely, the state of the services sector, including those that are involved in providing critical services, needs to be evaluated from the point of view of assessing its efficiency. Furthermore, in a phase when India is undergoing the process of integration with the global economy, it is very important to analyse the ability of different segments within the domestic services sector to withstand global competition.
The agricultural sector, too, presents a picture of apathy on the part of the officialdom to provide regular information that will help in taking decisions regarding the sector that lags behind the more dynamic sectors of the Indian economy. The agricultural census reports very useful data on the broad parameters relating to farm holdings, which is provided down to the level of tehsils, but the problem arises from the considerable lag with which the data is made available. The most recent series of data is available for 2005-06. The agricultural census follows a long established convention, wherein data is provided every quinquennium. It seems obvious that given the imperatives of decision-making, this convention needs to be put aside.
It is not merely the quality or timeliness in reporting that is a problem with those providing official statistics, lack of appreciation of the use to which the data can be put is also in evidence. One such example is available from within the agricultural statistical system. While the broad parameters on farm holdings are provided by the agricultural census, data pertaining to the use of various inputs is provided for the year after for which the census data is available. Obviously, inter-temporal comparability of data is something that the custodians of the agricultural statistical system do not want to trouble themselves with.
While plenty has been said and more will be said about the limitations of the country’s statistical system, it is the government and its various agencies that will have to realize the significance of reporting the developments in their domains in a cogent manner. As long as this does not happen, the data that is churned out will merely be suggestive, the vital will never be known.
Illustration by Jayachandran/Mint
Biswajit Dhar, is director general at Research and Information System for Developing Countries, New Delhi.
Comments are welcome at theirview@livemint.com
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First Published: Tue, Oct 25 2011. 01 16 AM IST