In this Mint article, Research Director and Senior Fellow Niranjan Rajadhyaksha explains how poor macroeconomic data standards undermine efforts to estimate economic activity and handicap policymakers.
"Indian statistics often resemble a hall of mirrors that the bewildered have to walk through. The images change with every step. The revisions in economic growth estimates by the government are only the most recent example.
For those who came in late, official statistics now show that the Indian economy grew at its fastest rate this decade in the year of demonetization. That flies in the face of all previous evidence, including the most recent labour market data that shows a sharp increase in unemployment.
Economic growth in fiscal year 2017 is now reported to be 110 basis points higher than the previous estimate. The estimate of economic expansion in fiscal year 2018 is a further 50 basis points higher than the earlier one. Even nominal growth for fiscal year 2018 has been bumped up by 130 basis points despite a sharp fall in inflation."
Read the full article here.