New CPI overstates inflation

Examine production and inflation data carefully before reaching hasty conclusions about vital policy matters

The numbers just never cease to amaze. As recently reported in the media, the Comptroller and Auditor General (CAG) has alleged, in a document tabled in Parliament, that Kapil Sibal's ministry (again!) could not account for a shortfall in the department of higher education of

Rs 116,000 crore in 2009-10. An idea of how staggeringly large this shortfall is can be gleaned from the fact that it exceeded the entire higher education budget of Rs 16,000 crore by more than seven times, or more than 600 per cent! If that doesn't catch somebody's attention, perhaps the fact that this shortfall was more than 11 per cent of the Central government's total revenue in the same year should have been a telltale sign. Or the fact that if this was the "corruption" shortfall in one ministry alone, and if one adds the corruption money alleged by the CAG for the other Sibal ministry (telecom) of Rs 176,000 crore, one arrives at the conclusion that corruption in two ministries alone was more than 5 per cent of GDP in 2009-10.

The CAG is an honourable institution, but its honour is beginning to wear thin. That it does not even begin to do the most basic checks on its mountain-top discoveries is revealed by the latest embarrassing stumble. It turns out that the CAG interpreted the HRD budget statement of lakhs as crores. That is it. A 100 times error, but how does that matter when the larger purpose is to fight corruption?

This is an extremely sorry state of affairs. Numbers can be confusing, and we all make mistakes. But I have yet to hear about a report being tabled in Parliament, alleging large-scale corruption, and done so without the most basic of checks.

... contd.

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