Concerns over data credibility baseless: CAs
Chartered accountants (CAs) across the country on Monday termed the concerns of economists and statisticians over India's data integrity and transparency baseless and debunked the allegation that the government was fudging official data.
While reaffirming faith in the government statistics, 131 CAs highlighted its credibility among international agencies and blamed the opposition for levelling baseless allegations ahead of the Lok Sabha elections.
The joint statement came in the backdrop of a release last week by a group of 108 economists and social scientists, alleging the government's interference in publishing official statistics.
The CAs alleged "foul play" by the opposition for levelling charges at a convenient time, just before the general elections, which, they claimed, resembled the "Award Wapsi" drama enacted just before a crucial state election.
The CAs said it was apparent that the opposition had choreographed the move, as even international agencies like the World Bank and the International Monetary Fund (IMF) confirmed the data released by the government agencies.
On the allegation of changing the base year for GDP (gross domestic product) calculation, they said: "Changing the GDP base year is a regular feature. The base year of the National Accounts Statistics series have been changed in August 1967, January 1978, February 1988, February 1999 and 2006.
"Base year changes are made to ensure that the data reflect the transitions as well as the disruptions in the economy. The re-basing exercise (the base year was changed from 2004-05 to 2011-12), which led to the change in GDP growth rates was set in motion by the UPA regime. The methodology for this was also approved by the UPA. That the numbers came out under the NDA is just a coincidence."
Launching a scathing attack on economists and number crunchers, the CAs said: "Between 1960 and 2014, India was left behind in economic growth by all its peers such as Japan, China, Taiwan, Korea, Brazil, Thailand, Indonesia, Malaysia, Singapore, Russia, South Africa and Sri Lanka.
"But none of the economists or social scientists raised the issue of India being on a slow track during those 54 years. Now when India has become the fastest growing economy in the world, they are worried about the credibility of data. Is it their intention to scare foreign investors?"
The statement further said for the first time, the new GDP series was compliant with the United Nations' guidelines in System of National Accounts-2008. It had better estimates of the unorganised sector on unincorporated enterprises, as well as data on sales and service taxes, it said.
Evidently, a methodology in compliance with the UN standard is symbolic as per the distinguished signatories, the CAs said.
They also discounted doubts over the processes and revisions. "In a large country like India, errors and omissions can happen while collecting and tabulating data. A few decades back, while calculating inflation, the price of iron ore was not revised for years. Later when the omission was corrected, it resulted in a huge spike in inflation.
"Data revisions are part of a healthy practice to balance between timeliness and accuracy. For example, all data sources have their bases changed at periodic intervals. The GDP data is normally revised five times before the final numbers are released. The final GDP numbers are again revised after all these revisions.
"The whole process takes about three years. Such revisions are not statistics in shambles but a reflection of the robustness of the process within the limitation of size and scale of data collection," the statement said.
Some Indian banks indulged in massive ever-greening of loans between 2008 and 2014. Equity markets were correctly predicting massive under-reporting of NPAs for years and the majority of PSU banks were trading below book value for years. Yet none of these people made an appeal to give credible NPA data. This raises doubts as to their true intentions, and one ponders whether this concern emanates from the upcoming elections, said the letter from the CAs.
The CAs included prominent names like Mahesh Baboo Gupta, Independent Director, Punjab National Bank, and Mohandas Pai, Chairman, Manipal Global and Indian Bank.
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