bjp boast of gdp increase = myth and reality

So the political tug of war for show off of the higher gdp numbers has begun. People posed their faith in this new government to deliver the promises. But seems like after the 100 days government has not stopped boasting big numbers and lines.

This time around the government has found an alternative to mystify the public by overhauling the methodology itself. Looks like the dismal industry numbers have forced to do something out of the box.

but let me demystify you. the boasting that by increasing the inclusive basket and increasing the production function itself will bolster the gdp numbers by 2-3% is a bit kite flying in the air.

The changing of the production basket and changing the base year is routine exercise carried usually in the gap of 5 years. Long time has passed when the production basket was increased. Probably in 1999-2000.

Also to point out that with no increase in real production output numbers, even if you manage to increase gsp numbers by changing the base year and production basket, this increase will only be once. After that falling to original growth rate number will be the reality and policy makers will get confused and even confused will be the public and opposition who claimed initially for the increased numbers will be harsh on the new government on the decreased numbers and will make them responsible.

So to make free boasting and rhetorics about increasing numbers will only put the country in fogs. One more thing about this government is the habit of doling out incomplete information about the policy matters. Nothing has been said about the details of the programme.

The important thing to be taken out from this episode are few questions. The first is the exactitude of the numbers which are gathered. First look at the precision of the numbers that the capacity offers let alone trying to cover the full baskets which is near impossible. Is the infrastructure adequate currently or more is required. an interesting comparision between india and china shows that india has about one third of that of Chinese data collectors. The width and diversity of the datas remaining same the stark contrast in the numbers shows the lack which should be corrected first. The real problem lies with the informal sector, its true. and specially among it the small scale manufacturing and the micro manufacturing enterprises. There are about 4.1 crore of small scale manufacturing enterprises. Out of it only 3 lakh are registered. Implies less than 1% of the entities are known to us fully, other are only haywire.

Another problem is which data to rely upon for the policy formulation. Every other data collected by different entity and organization are different and some even differ vastly. The states are accused of inflating gdp numbers to show off their work beyond capacity and potential. These discrepancies are to be corrected first rather than make people believe on weak foundations.

The problems are basic yet again. Only correctness is required which is not an easy task per se. we are a poor developing country, and we have a much robust data enumerators with us. We are better than most of the developing counterparts, also considering the sheer amount of data we collect. But only praising outr efforts for the natural blessing or this curse is not the solution. We have huge hopes for our nation, with the government and with ourselves as well. Let us not belie ourselves.