Economic Progress or, Data Delusions?

One keeps wondering why Cricket is so popular in a poor but populous country like India. Presumably, one reason for its popularity is because every action of the batsman, the bowler and the fielder is reduced to easily comprehensible numbers. But the power and reach of numbers is not confined to sports alone. Data as they say is the new oil that lubricates the wheels of commerce. Today big tech companies collect data in many a subtle way and they zealously guard the same. Obviously, data provides them enormous, cost effective reach and influence and we have instances where such data has been harnessed to even influence election outcomes by “micro-targeting” a la Cambridge Analytica. All this has given rise to global wrangling on data colonization and where the data has to be stored and accessed.

And now the political leaders and their governments have woken up to the potential uses of data not only to manipulate public opinion but also to target dissenters. The ministry for Information& Broadcasting in reply to a question in the latest monsoon session informed the Rajya Sabha members that the government has spent over Rs 3000 crores since 2018 on advertisements. And despite all the protestations to the contrary, the digital revolution has rendered it easy and tempting for government to snoop on its own citizens through imported, clandestine and embedded spyware like Pegasus. Although in August 2017, a nine-judge bench of the Supreme Court, in Justice K. S. Puttaswamy (Retd) Vs Union of India unanimously held that Indians have a constitutionally protected fundamental right to privacy that is an intrinsic part of life and liberty under Article 21, the government has repeatedly used the “national security card” to justify such infringements. However, it is reassuring to see that Government has now tabled Digital Data Protection Bill 2023 in the parliament. While there is consensus on the need for such a Bill, no less a person than Justice Shrikrishna (retd) of the Supreme Court, who had proposed the first draft of the Bill in 2018, says that the provisions granting exemption to the government and government bodies from all sections of the law in the draft Digital Personal Data Protection (DPDP) Bill, 2023, cause “great concern”, particularly when the government acts as the enforcer, judge and the jury, all rolled into one.

An equally worrying aspect is dressing up macro economic data to suit the political masters of the day. This takes various forms like using outdated data, arbitrarily shifting the base year for computing series like employment figures or GDP statistics, changing composition of indices or using extrapolation and all manner of surrogates to infer economic outcomes. Take the case of India’s services sector. The segment is now responsible for roughly half of the household’s spending as per surveys by RBI and others, but it has a weight of only 24 per cent in CPI, which hasn’t been updated since 2012. No wonder Economic Advisor Bibek Debroy says that our ability to track inflation has been seriously undermined. Or, take this classic case of bureaucratic somnolence, where the Ministry of Statistics collects or extrapolates sales data for near obsolete items like audio cassets. How will companies and investors, both domestic and foreign, form a nuanced picture of the demographic and consumption pattern in the world’s fifth largest economy? Outdated data is not the only issue. Frequent revisions to existing data have added to frustrations of statisticians and economists. Data revisions in recent years made India’s growth look impressive during the devastating cash ban and its aftermath. During a later revision, economic contraction from pandemic narrowed making our recovery look bouncier. According to F C Mohanan, the former head of National Statistical Commission, who resigned in 2019 to protest the government’s decision to withhold a jobs report, “there is a credibility crisis when it comes to using the official data”. Dr, Pronab Sen, former Chief Statistician and a highly regarded person for his professional integrity, warns that lack of reliable data increases the risk of policy errors. He says; “we have programmes for people below the poverty line, but we do not know the number of poor”.

And well, there is a surfeit of cases where the Government cherry picks data to be highlighted in the media. The latest MPI (Multi-dimensional Poverty Index) is now touted as the measure of success achieved by India in substantially reducing the proportion of MPI poor. MPI incidentally takes into account health, education and standard of living, but not income in a direct sense. While sundry politicians talk about UNDP figures which estimate that an impressive 415 million people have moved out of MPI poverty between 2005-06 to 2019-21, rarely anybody speaks of UNDP’s Human Development Index (HDI) which is modeled around per capita income, life expectancy at birth and mean years of schooling which paints an unflattering picture with India ranking a lowly 132 out of 192 countries, just managing to be above countries like Ghana and Pakistan (if that is any consolation!). So, “economic progress” is often predicated on cherry picked than objective data.

Of course, there are any number of “experts” in the bureaucracy and subservient median channels who trot out all manner of explanations, befuddling and hijacking debate beyond common sense of the common man by indulging in esoteric discussions on sampling techniques like stratified sampling, random sampling or frequency distribution patterns, etc. It is worth noting what Shri G P Samanta, Chief Statistician said at an event less than two months ago: “What we cannot measure, we cannot manage”, highlighting the need for data to be reliable and easily comprehensible both to the policy makers and the common man.

One hopes that the Central Statistical Organisation (CSO) will indeed introspect and expand its coverage to provide apolitical data, if only because its consumers need to expand beyond Central and State Governments. Granular or, micro-level data that are currently collected by large MNCs via AI tools is proprietary with them. Why should it be difficult for CSO to do better than these firms? India has digitized massively in the last few years. Certainly CSO has the expertise and resources to use this new feature in the Indian economy to collect and collate more reliable data faster.

In his book “Something Doesn’t Add UP, Surviving Statistics in a Post Truth World”, Paul Goodwin, the well known teacher of statistics notes that “there are two worlds; they are the world of reality and the world of numbers. And the second world is usually at best a simplification of the first and at worst a gross distortion of it”.