Junk Nasty Jobs Report, Publish Rosy Ones: How to Trust Our Data?

This is not the only report that was junked. And some published data too have presented a partial picture.

4 min read

Withhold the report that says demonetisation killed jobs and therefore caused immense harm to the economy. Who cares if the two key officials managing the National Statistical Commission, an independent body that is tasked with supervising all statistical reports of the government, resign in protest?

Quoting a yet-to-be published National Sample Survey Organisation (NSSO) report, a Business Standard report indicates as much. It says the rate of unemployment at 6.1 in 2017-18, a year post dreaded demonetisation, was at the highest level in 45 years. Demonetisation, by no means, was the only villain. But it certainly was a tipping point and the government of the day did not allow the report to be placed in public domain.


The Business Standard report highlights that:

  1. Joblessness among rural males in the age group of 15-29 climbed from 5 percent in 2011-12 to more than 17 percent in 2017-18. Can we still deny that rural distress is not alarming, despite promised doubling of farm income in a few years?
  2. Joblessness among urban males in the same age group climbed from 8 percent in 2011-12 to nearly 19 in 2017-18. Has Make in India, which was meant to create quality jobs in the formal sector, been anything but a jumla?
  3. What is worse, the labour force participation rate (LFPR), an indication of people offering themselves to be hired in the job market, too dipped to a low of just 36 percent in 2017-18 compared to nearly 40 percent in 2011-12. The LFPR in developed countries stays close to 60 percent. And it has been at around 40-45 percent back home too.
  4. What the Business Standard report suggests is that fewer people are seeking jobs now than what was the case in 2011-12. And even among those who are willing to be hired, nearly one-fifth of them remain jobless! Need more proof to say that the job market has all but collapsed?

Data Management?

This is not the only seemingly unpalatable report that has been junked. There are many more. And some published data too have presented a partial picture. Here is a sample:

  1. According to yet another Business Standard report, “the Department of Industrial Policy and Production (DIPP) has not published foreign direct investment (FDI) figures since June last year, despite the Reserve Bank of India (RBI) providing it with regular inputs. Earlier, this data was published every quarter.” Does this mean that the FDI inflow is reduced to a trickle now and it is embarrassing for the government to publish the data regularly? What has happened to the recurring themes of fastest growing economy and the growing heft of our passport?
  2. Labour Bureau’s report on annual employment-unemployment survey for 2016-17 is yet to be published. What has been promised instead is a new report using different set of parameters to get an estimate of joblessness. While the promised new one is yet to come out, the ongoing series has been conveniently junked.
  3. We are still awaiting a final report on the outcome of demonetisation.
  4. And a recently released CAG report has revealed that our debt level is much higher than what has been presented in recent annual budgets. Interest payment, therefore, as part of total revenue expenditure, has gone up from 23.2 percent in 2012-13 to 26.1 percent in 2016-17.
Do we need more proof to show that data sanctity has been compromised in recent years? The perils of weak or managed data are well documented and here is a snapshot:
  1. It leads to haphazard policy response sans desirable result. It is like shooting in the dark, focusing on managing headlines rather than managing outcome.
  2. It cuts the feedback loop which tells you how and when to respond when the going is tough. No wonder the government seems clueless in the face of acute rural crisis.
  3. Weak data means your revenue projection can go awry. We have seen the case of projected revenue from Goods and Services Tax. Even months after the implementation, the government is yet to get the revenue it expected to get. Case of inflated expectation on the basis of inflated data?
  4. Targeted welfare schemes can go for a toss if we don’t have correct estimation of the number of beneficiaries.

Investor Community Has Given Thumbs Down to Our Data Regime

Because of the government’s focus on managing headlines rather than publishing actual numbers, our data collection and dissemination regime seems to have lost its credibility. Is that the reason why investor community has shied away from Indian markets despite much thee publicised fastest growing economy tag? We just need to take a look at the following three numbers to get a sense of investor indifference:

  1. Foreign Portfolio Investors withdrew in excess of one lakh crore rupees from Indian markets in 2018 alone. This happens to be the highest outflow in 10 years.
  2. Net foreign direct investment inflow has been consistently falling since 2015.
  3. According to a CMIE report, “new investments during the quarter ended December 2018 would be among the lowest recorded in well over a decade.”

Data management has been a problem confined to authoritarian regimes thus far. A recent paper by Chicago University professor Luis R Martinez concludes that China, Russia and other totalitarian regimes inflate official GDP numbers in a given year by 15 to 30 percent.

He argues that “although the incentive to exaggerate economic performance is ever-present, we expect that a well-functioning democracy can rein in, to some extent, the impulse to manipulate official statistics.”

In the light of above observation, where should we place ourselves in the democratic-authoritarian axis, now that several attempts to manage data have come to the fore?

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