Mark Twain once famously said “There are three kinds of lies: lies, damned lies, and statistics.” Modi Government seems to have taken this quote to its heart literally - specially when they encounter uncomfortable statistics. So the government seems to have turned the quote on its head.
This one is a series of posts I have compiled to point out to a serious credibility crisis on Government data and its inclination to hide uncomfortable data. This is the first post in the series :
I. Consumption Expenditure Survey
The most recent example of such data treatment was when Business Standard broke the story of a NSSO survey of consumption expenditure. The report is alleged to have concluded that for the first time in four decades the consumption expenditure has reduced by an average 3.7% (year 2017-18).
A reduction in consumption by citizens is worrying on two counts - it further strengthens the theory that the economy is facing a demand deflation leading to slowdown - something that the government has been trying to refute steadfastly and consistently. Second, more worrying is, that economist associate consumption reduction with increased poverty. This, in simple terms, mean that the survey shows that poverty has increased or the first time in the country in almost half a century.
Dig a little deeper into the survey and it cements our concern of what we intuitively knew for quite sometime - rural distress. The average 3.7% decline in consumption masks the fact that the rural consumption actually dropped by a massive 8.8%. The average comes down to 3.7% because there is a minor increase (of 2%) in urban consumption.
The last such survey conducted in the year 2011-12 showed a overall increase of 15.5% over the previous survey conducted in 2009-10 with rural and urban consumption growing by a robust 11.5% and 13% respectively. The last time this survey showed fall in consumption was in 1972-73 due to Global oil crisis.If we dig deeper into data - Rural areas show a sharp reduction in consumption of food items - which is a strong signal of increased poverty.
This data becomes all the more damning because it supports the theory that the pet move of Modiji - Demonetisation - threw the rural economy in distress and it is still spluttering unable to recover. Most critics of demo, including me, have been pointing out the demonetisation apart from failing on all its initial objectives have damaged the informal economy most and hence would create huge problems for the rural sector most. This survey strongly supports that analysis. The report is based on data of time which was a few months after demonetisation and coincides with the implementation period of the GST. If our criticism of sloppy implementation of GST is also correct then this decline may have further deepened.
But That is NOT the complete story
You would expect any well meaning Government to take this data up for open minded discussion and look forward to addressing the stress. Right ??
Not in this case. This report was supposed to be released in June 2019. But it was gathering dust in the NSSO for obvious reasons. The apparent reason was that the Government felt that the report has "data issues". Finally this report was leaked by Hindu in a second such case of great investigative journalism.
We need to understand that this report and hence its contents were available to the new Finance Minister and do we see any moves in the Budget to address the distress. The answer is no.
So, what would you expect from the Government as a response to such a report??
This is not the first time Modi government has suppressed uncomfortable data to manage narrative. Stay tuned for more posts in this series listing the ways in which our officials data is either suspect or is being hidden from public scrutiny to avoid facing uncomfortable data that raises questions on the quality of Governance.
This one is a series of posts I have compiled to point out to a serious credibility crisis on Government data and its inclination to hide uncomfortable data. This is the first post in the series :
I. Consumption Expenditure Survey
A reduction in consumption by citizens is worrying on two counts - it further strengthens the theory that the economy is facing a demand deflation leading to slowdown - something that the government has been trying to refute steadfastly and consistently. Second, more worrying is, that economist associate consumption reduction with increased poverty. This, in simple terms, mean that the survey shows that poverty has increased or the first time in the country in almost half a century.
Dig a little deeper into the survey and it cements our concern of what we intuitively knew for quite sometime - rural distress. The average 3.7% decline in consumption masks the fact that the rural consumption actually dropped by a massive 8.8%. The average comes down to 3.7% because there is a minor increase (of 2%) in urban consumption.
The last such survey conducted in the year 2011-12 showed a overall increase of 15.5% over the previous survey conducted in 2009-10 with rural and urban consumption growing by a robust 11.5% and 13% respectively. The last time this survey showed fall in consumption was in 1972-73 due to Global oil crisis.If we dig deeper into data - Rural areas show a sharp reduction in consumption of food items - which is a strong signal of increased poverty.
This data becomes all the more damning because it supports the theory that the pet move of Modiji - Demonetisation - threw the rural economy in distress and it is still spluttering unable to recover. Most critics of demo, including me, have been pointing out the demonetisation apart from failing on all its initial objectives have damaged the informal economy most and hence would create huge problems for the rural sector most. This survey strongly supports that analysis. The report is based on data of time which was a few months after demonetisation and coincides with the implementation period of the GST. If our criticism of sloppy implementation of GST is also correct then this decline may have further deepened.
But That is NOT the complete story
You would expect any well meaning Government to take this data up for open minded discussion and look forward to addressing the stress. Right ??
Not in this case. This report was supposed to be released in June 2019. But it was gathering dust in the NSSO for obvious reasons. The apparent reason was that the Government felt that the report has "data issues". Finally this report was leaked by Hindu in a second such case of great investigative journalism.
We need to understand that this report and hence its contents were available to the new Finance Minister and do we see any moves in the Budget to address the distress. The answer is no.
So, what would you expect from the Government as a response to such a report??
Ideally the Government must initiate a debate on the veracity, applicability and lessons from such a report. But what does our government do. It denies the problem in the first instance itself. The Government has scrapped the report and cancelled its official release. Simple solution to nutty problems. No Data - No Problems.
This is not the first time Modi government has suppressed uncomfortable data to manage narrative. Stay tuned for more posts in this series listing the ways in which our officials data is either suspect or is being hidden from public scrutiny to avoid facing uncomfortable data that raises questions on the quality of Governance.
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