People's Democracy

"Lies, Damned Lies And Statistics"

Sitaram Yechury

IF ever this old English adage were true, then this should apply to the statistics released by the Central Statistical Organisation (CSO) on February 9, 2004.   The `advance estimates' of national income for 2003-04 released by the CSO places the growth in the real Gross Domestic Product (GDP) at a staggering 8.1 per cent.  This suits very well the BJP-led NDA's campaign of a "shining India" and its "feel good" factor. 

Before coming to the real content of these statistics, it is necessary to comment on the quality of statistics being put out by the CSO and other organisations in recent years.  Consider the following:

The `advance estimates' of the CSO in February 2003 showed that the economy expanded by 4.4 per cent in 2002-03.  The `revised estimates' of June 2003 downscaled this figure to 4.3 per cent. By the end of the financial year, the CSO further lowered the growth figure to 4 per cent, according to the `quick estimates' of January 2004.  Between the `advance estimates' of 2003 through the `revised estimates' of June 2003 to the `quick estimates' of January 2004, the size of the economy suffered a massive Rs 13,000 crore reduction! Only time will reveal the extent of downscaling that would be done with the 2003-04 statistics. In the meanwhile, however, the elections would have come and gone, giving the ruling government a distinct advantage!  If the "feel good" factor is a lie, the "shining India" campaign a damned lie, then these are statistics!

The reduction in the rate of expansion of the economy for 2002-03 automatically raises the growth rate for 2003-04 because this rate is measured on the base of the previous year.  Therefore, even if the growth in the current year is not spectacular, it can be shown to become spectacular by reducing the growth rate of the previous year.  Therefore, while considering the growth rates for the current year, this statistical sleight of hand must be kept in mind. 

With regard to the agricultural sector, such statistical manipulations and consequent illusions of growth become more manifest.  As we shall see subsequently, the major impetus for the growth for the current year has been due to agricultural recovery with the good monsoon following the disastrous drought last year. The statistics concerning the agricultural sector baffle us even more.  Consider the following: 

During 2002-03, the agricultural ministry has estimated foodgrain output to have plunged by minus 13.89 per cent (from 212.03 million tonnes to 182.57 mt), with the dip amounting to 24.28 per cent (from 20.80 mt to 15.75 mt) for oilseeds, 7.73 per cent (from 10.09 million bales to 9.31 million bales) for cotton, 7.39 per cent (from 11.64 million bales to 10.78 million bales) for jute & mesta and 7.18 per cent (from 300.10 mt to 278.56 mt) for sugarcane.

However, despite this, the agriculture sector, according to the CSO `quick estimates' of national income for 2002-03 released on January 30, 2004, registered a negative growth rate of just minus 5.2 per cent.  Although this is more than the minus 3.2 per cent figure as per the earlier `revised estimates' released on June 30, 2003, even a 5.2 per cent contraction in the farm sector last year appears an underestimate, seen against the 14.28 per cent decline in the output of foodgrains and oilseeds. 

One reason for the overall agricultural growth being totally unrelated to the situation in the traditional agricultural crops is due to the fact that agricultural sector not only includes crops but also allied sub-sectors like livestock (milk, egg, meat) which accounts for nearly 25 per cent of total agricultural GDP, horticulture accounting for 19 per cent of agricultural GDP, while another fraction comes from forestry & logging, fishing etc. 

The CSO's estimate of the agricultural sector declining only by minus 5.2 per cent while foodgrain production declined by minus 13.9 per cent is based on an unreal assumption that the drought did not impact on the production of fruits, vegetables, milk or livestock. Such an assumption is being made despite the widespread reports of cattle death due to drought conditions. When human deaths occur due to starvation, can cattle and livestock be far behind?  The CSO, however, thinks so!  The illusory "feel good" factor!  It is, indeed, a tragedy that India, having one of the best data collecting resources and organisations in the world, is seeing the rapid erosion of these institutions by political interference!

Having said this, let us consider the anatomy of the `advance estimates' for 2003-04 released by the CSO predicting the growth rate of 8.1 per cent (8.05 per cent to be precise).  The basis for such an estimate rests wholly on the revival of agriculture due to a good monsoon this year.  Despite "India shining" and the "feel good" factor, it is, after all, the mercy of the "rain gods" that determines India's growth trajectory even now!  Agriculture is estimated to have grown by 9.12 per cent compared to minus 5.2 per cent last year!  Remember, in 2001-02, the agricultural growth rate was 6.5 per cent. Compared to those levels, the growth registered is nothing spectacular.  Only after the examination of the detailed tables, can we ascertain if the foodgrain production has reached its earlier 2001-02 levels.

Industrial growth rate, according to the CSO, has been 6.48 per cent compared to 6.44 per cent last year.  The captains of Indian industry, acting more as the cheer-leaders and drummer-boys of the Vajpayee government have, in sum, grown this year at a rate which is 0.04 per cent more than last year's growth rate.  So much for the orchestrated euphoria!

The services sector, we are informed, has grown at a rate of 8.44 per cent compared to 7.14 per cent last year.   By itself, this is nothing spectacular.  What is significant, however, is that within the sub-headings under this sector, growth has only been seen in the areas of trade, hotels, transport etc.  Other sectors show a decline or, at best, a stagnation. 

Once again, it is clear that after the initial slump in tourism and travel following the September 11, 2001 situation, these sectors are now recovering. This recovery has very little to do with the Vajpayee government or its performance.  In other words, it is the "rain gods" that boosted our economy's growth in the agricultural sector and it is the international situation that is seeing a recovery of tourism and communications. This growth, therefore, has very little, if anything to do with the policies or the performance of this government. If anything, if the policies of this government were not those that they have followed -- mindless liberalisation and reckless privatisation -- then the possibilities of a better growth would have surely happened.

The economic fundamentals of our country, irrespective of the statistical showcasing being done by this government, continue to remain worrisome.  This is imposing unprecedented burdens on our people with burgeoning unemployment, starvation deaths, distress suicides and rising costs of all items of daily consumption.  It is on the issues of basic livelihood that the people shall vote in the coming elections. And, on this score, no amount of orchestrated euphoria can come to this government's rescue.