Economists and independent statisticians have questioned the quality of official data collection mechanism as August’s low industrial output growth rate of 1.3 per cent sparked fears of a recession in the Indian economy. Ironically, assertions by both finance minister P Chidambaram and commerce minister Kamal Nath that the fundamentals of the economy are strong went largely unnoticed.

The Centre for Monitoring Indian Economy (CMIE), a data collection agency and think tank, has in the past too questioned the relevance and reliability of IIP (index of industrial production) in capturing industrial growth trends.

In fact, according to CMIE, industrial growth in the April-June quarter this fiscal was above 20 per cent. The official IIP data, however, said industrial output grew just

5-6 per cent during the period, Mahesh Vyas, CEO and MD, CMIE, told The

Indian Express. Such marked variations indicate that even though there might be a powering down of the economy because of a global slowdown, the situation is not as bad as it seems from the official data.

On industrial output, CMIE has said that in the recent past, traces of a slowdown were noticed only in 2007, which lasted till December, after which the industry recovered once again. “With good tax collections, a strong export growth, good railways and port traffic and good growth in non-oil imports, it is difficult to believe that the economy could be headed for a recession,” Vyas said.

However, the fact remains that it took the slowest year-on-year industrial growth in 10 years for the government to suddenly sit up and take notice of the country’s inept data collection system.

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