Two revisions in 24 hours: That’s how bad India’s economic statistics are

India's finance minister and central bank governor, trying to sort out the statistics.
India's finance minister and central bank governor, trying to sort out the statistics.
Image: (AP Photo/Saurabh Das)
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China has been grabbing the headlines of late for the shoddy state of its statistics. It seems India wants its share of the limelight. In a feat unlikely to be matched anytime soon, India corrected its factory output data twice in 24 hours.

The original press release on Wednesday stated that the Index of Industrial Production—a key component of GDP calculations—expanded 2% in April. A day later came the announcement that the index had actually grown 2.2%. And two-and-a-half hours after that, the government admitted that there had been errors in the collection of electricity sector data. The factory output for April was now 2.3%.

Though in this case the differences were fairly minor, such glitches and goof-ups are not new in India. January 2012’s industrial production was revised from 6.8% to 1.1%. The government’s excuse: an error in sugar output calculation.

Then in August 2012, India restated GDP data for the fiscal years 2009 and 2010 (i.e., from March 2008 to April 2010). Countries typically revise their initial GDP figures, but usually a few months later, not a couple of years. The markets were surprised to find that growth had been better than previously thought before the global economic crisis, but that the economy slowed much more than initially reported during the crisis.

It’s an open secret that outdated data are routinely used by India’s statisticians. Even the central bank governor D Subbarao admits that policy making is often “plagued by incomplete, inconsistent or non-timely data.” Surely India’s government could focus a little attention on collecting data that its own central banker can trust.