Data volatility tied to structural changes in economy
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Statistics and Programme Implementation secretary TCA Anant speaks on the recent economic data and the investment torpor in an interview with FE's Banikinkar Pattanayak and KG Narendranath. As increase in volatility and conflict among different data sets have somewhat dented the credibility of official economic figures, the country's chief statistician seeks to explain why volatility has been a historical trait, and outlines the systematic processes to address it. He also explains why corporate financial statistics don't necessarily correspond with the index of industrial production (IIP) data, even as a committee is studying why the two are barely in conformity with each other.
What is your assessment of the GDP growth in the second quarter? Will it be lower than the first quarter or will it remain at the same level?
I don't attempt to forecast the growth in the gross domestic product (GDP). There are other groups, such as the Prime Minister's Economic Advisory Council (PMEAC), which make the forecast. We at the Central Statistics Office (CSO) don't make forecasts about the GDP. Under the circumstances, and considering the nature of my job, it would be good on my part not to try to make any forecast about the GDP.
You have said investment in the country is tightening, also because of its cyclical nature since 2008 (not just adverse external factors and the domestic policy impasse)?
That's something I had assessed and that was correct. That investment has cyclical properties is well documented. And I think in India, we were heading for — even if nothing like the global macro-economic crisis would have happened — a slump on account of a slowdown in investment. But then, the slowdown in investment also got combined with certain other events, including the global crisis, which overlapped it.
The investment cycle is assessed, assuming all other parameters remain the same. But in the actual economic situation, not all these remain the same. So what happened to our growth rate is an assessment based on a combination of long-term and short-term factors. Most analysts who study India say the long-term prospects are bullish, but the question is how will the short-term factors work themselves out. And that is very hard to say.
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