Sugar output blunder led to January IIP mistake

Sugar output blunder led to January IIP mistake

New Delhi: India’s chief statistician T.C.A. Anant said on Thursday that a blunder in sugar production estimates was responsible for the government being forced to slash the factory output growth number for January. The government said the index of industrial production or IIP actually grew 1.1% and not 6.8%, as reported previously.

“This wrong figure was taken because of incorrect reporting by the directorate of sugar in the ministry of consumer affairs, food and public distribution," Anant said. “Due to this change and also minor updation of data received from other source agencies, the IIP for January 2012 has been revised from 187.9 to 177.9 and, therefore, growth rate over the corresponding period of previous year has been revised from 6.8% to 1.1%."

The admission will further undermine confidence in government data, which is used as the basis for a wide range of policy decisions.

Policy makers and economists have previously been critical of the volatility in IIP data, with Reserve Bank of India governor D. Subbarao calling it “analytically bewildering."

The changes in January data have resulted in the growth rate for consumer non-durables during the month being cut to 11% from 42.1%. Overall consumer goods growth was slashed to 2.9% from 20.2%. Following the revision, the cumulative growth rate in the April-February period was revised to 3.4%. from 4%.

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