Eminent economist Raghuram Rajan has voiced doubts about whether the Indian economy is really growing at seven per cent. It's the jobs data, or lack of it, that is leading to such fears over GDP figures. Are there enough attributes to sustain belief in the figures as we have come to know them since the base year was changed to 2011-12? There's no arguing against the need to change base years as decades have passed since the standard was fixed for compiling economic data. However, it's the ongoing election season that is to blame for the kind of distortions that were allowed to slip into the system, clouding the reality of GDP numbers as an index of growth, said to still be the world's fastest.
The former RBI governor, who was at the heart of the Indian system, suggests an independent and impartial body to examine the data. The system is blessed enough with organisations to compile and study data. What is required is honesty to be able to pinpoint why the signs over the economy are still negative as seen in jobs getting scarce, agrarian distress expanding, lack of growth in the large unorganised sector and the corporate sector by way of absence of fuller capacity utilisation and alarmingly shrinking exports. These factors add up to suggest that a propagandist growth rate isn't the same as what such growth should do for the economy, mainly by creating jobs. Whichever government comes to power after May 23 and whoever leads it, what is needed is total transparency in data, because without real data, policy planning becomes meaningless.
As many as 108 economists and social scientists wrote an open letter to warn about India's official data losing credibility while a group of chartered accountants pointed to buoyant income-tax collections as if to prove the obverse. Greater tax compliance is not to be taken as an index of jobs being created, whereas the hide and seek with the unemployment rate data is disrupting the presentation of the real picture. The point is India's data is and should be sacrosanct, and based on which much of the nation's economic rising might has also been recognised internationally. To tamper with that or to distort it for political purposes would prove counterproductive for the country even in the short term.
The new government's immediate task would be to open up the jobs and unemployment data and introspect over why we got here, and what can be done to generate jobs as at least 15 million people are aspiring to join the workforce every year. In the end, performance is to be judged by what India can do for its youth by way of jobs. Given our population, we have to be a labour intensive rather than automated country, and we have so much to do for our farmers and the poor....