Patchy official data is not something new to India. What is surprising is the lack of effort to check the problem. In any economy, let alone that of India’s size, absence of reliable data leads to policymaking in the dark.
On Tuesday, the gross domestic product numbers for the first quarter of 2011-12 and the revised numbers for 2010-11 were released. The revision in the 2010-11 data was particularly interesting.
Most of the changes are due to the use of high frequency, but poorlycovered data, such as the Index of Industrial Production, and estimates —such as those in agriculture—that often go awry. Agricultural growth was revised upward from 5.4% to 6.6%, mining and quarrying down to 5.8% from 6.2%, manufacturing down to 8.3% from 8.8% in the advance estimates.
These magnitudes may seem small, but as India grows bigger at a fast pace, the danger of policy mistakes from relying on poor data will only rise.