Modinomics = Falsonomics: Part II

It is not just GDP data that the government is fudging. It is fudging or is blocking the publication of every kind of data related to the functioning of the economy that shows that the economy is not doing well and which therefore puts the BJP in a bad light.

 

Employment–Unemployment Surveys Scrapped

 

Thus, for instance, the government has discontinued the quinqennial NSSO Employment–Unemployment Surveys (EUS) conducted by the National Sample Survey Organisation (NSSO) under the Ministry of Statistics and Programme Implementation as well as the Annual Employment–Unemployment surveys conducted by the Ministry of Labour and Employment.

 

The NSSO–EUS, like all the other NSSO surveys embodied the idea with which the organisation was instituted in 1950 by Professor Mahalanobis, widely regarded as the father of Indian statistics. His vision for the organisation was to obtain and quantify comprehensive information on an annual basis on the socio-economic, demographic, sectoral and other profiles of the country, both at the national and state levels. After trying different approaches and concepts,  the NSSO standardised the concepts and definitions of labour force, employment and unemployment, which were then adopted in quinquennial surveys (large sample sizes of over 100,000 households) on employment and unemployment which have been conducted regularly since 1972–73 in rural and urban areas.

 

The quinquennial surveys served as an extensive source of information pertaining to not only the levels of labourforce participation rates, work participation rates and unemployment rates, but have provided rich information on the levels of under-employment, different categories of workers, their living conditions and contractual status (self-employed or wage employed and their types), level of wages and earnings, occupational structures, status of informal labour and several other indicators of the quality of the workers and the non-workers.

 

In all, there have been a total of ten rounds of these surveys which provide validated and internationally comparable long term statistics pertaining to the Indian labour markets. After the 68th round that occurred in 2011–12, the next round was due in 2016–17, but the Modi Government has discontinued it. No public announcement was made about the reasons, the survey was scrapped silently. Probably its scrapping had something to do with the uncomfortable data from the fifth round of the Annual Employment–Unemployment Survey of the Labour Bureau (discussed below), after which this survey too was discontinued by the Modi Government.[i] 

 

The Annual Employment–Unemployment Survey (EUS) was begun in 2010, to make available some data annually, and was conducted by the Labour Bureau. The report of the fifth round was released in September 2016. As per this report, the unemployment rate in India shot up to a five-year high of 5 per cent in 2015–16. The survey reported that about 77 per cent of the households were reported to be having no regular wage or salaried person.[ii]

 

Following the release of this report, the Modi Government decided to discontinue not just the Annual Employment–Unemployment Survey but also the NSSO’s quinqennial survey. The latter survey is a more in-depth survey, and would have revealed in greater detail the serious employment crisis gripping the economy, especially after demonetisation. The ostensible reason given for scrapping these surveys is that they make available data after a lag, and so do not help in policy making.[iii] But the real reason lies elsewhere is obvious from the fact that following the scrapping of these surveys in 2016, the government has made no data available about the unemployment situation in the country for the past three years! The only plausible conclusion that can be drawn is that the government does not want the truth about the disastrous impact of demonetisation and GST on the employment situation in the country to come out. Several private surveys have revealed that these policies have caused enormous job losses—for instance, the Centre for Monitoring Indian Economy (CMIE) reported that 1.5 million jobs were lost during the first four months after demonetisation (January–April 2017).[iv]

 

Statisticians Rebel

 

The government came under immense criticism for its failure to come up with a new survey to estimate the employment situation in the country. So, it instituted another employment survey, the Periodic Labour Force Survey (PLFS), to be done by the NSSO. This survey was conducted between July 2017 and June 2018. It was important as it was the first official survey of the country’s employment situation after Prime Minister Narendra Modi announced the demonetisation of high-value currency notes in November 2016. Despite the National Statistical Commission (NSC) approving the release of the data—and the NSC is the apex body that coordinates India’s statistical activities and is autonomous[v]—the Modi Government decided to withhold its release. Unfortunately for the government, its attempt to give this report a quiet burial failed, because India’s statisticians finally revolted. They had had enough.

 

On January 28, 2019, the only two non-government members of the National Statistical Commission, P.C. Mohanan (who was also the acting chairperson of the Commission) and Delhi School of Economics professor J.V. Meenakshi resigned from the Commission to protest the delay in the release of the report, though the NSC itself had officially cleared it. A newsreport quoted one of them as saying, “The commission is being sidelined, neglected. We felt that the NSC was not doing its job and we were not being involved in key decisions. The NSC’s job is to restore trust in official statistics and we were not serving that purpose.”[vi]

 

The resignations of India’s top statisticians created a furore in the media. Soon after, on January 31, 2019, the Business Standard newspaper obtained and published important details from the report. The leaked data indicated that the survey had found India’s unemployment rate to be at a 45-year-high of 6.1 per cent in 2017–18.[vii] This report tallies with another CMIE report that suggest a terrifying situation, with job losses amounting to 11 million for 2018.[viii]

 

True to form, Union Minister Jaitley, who is more of a blogger than a minister, immediately issued a rebuttal from his hospital bed in the United States, claiming it was an “unverified draft”, while back in India, NITI-Aayog Vice Chairman Rajiv Kumar held a ‘damage control’ press conference on the very same day to assert that the NSSO report was not final as the government had not approved it yet. When asked by reporters as to who in the government was supposed to approve the report, he fumbled, “I suppose the Cabinet will approve. I don’t know.” Both these statements were rubbished by experts. P.C. Mohanan, who had resigned from the Chairmanship of the NSC just a few days ago, lambasted Jaitley’s and Kumar’s claim that it was a “draft” report and asserted that it was the “final report” and needed no further approval. Former Chief Statistician Sen, when asked if it was a practice to get the Union Cabinet’s approval for NSSO reports, emphatically stated, “It has never happened. No. Never.”[ix]

 

And Bibek Debroy, chief of the Prime Minister’s Economic Advisory Council, declared recently that a new national sample survey will be conducted by the government to show there is substantial job creation—a chilling and open admission that the government would window-dress national employment data.[x] What brazenness! But it is reflective of the mentality of the entire Modi Government—that they are accountable to no one, and can subvert any institution in the country to further their agenda.

 

Even Mudra Job Survey Goes Underground

 

More recently, it was reported in the media that the government has suppressed the publication of yet another employment survey: by the Labour Bureau on the number of jobs created under the Micro Units Development & Refinance Agency (MUDRA). This survey by the Labour Bureau covered an estimated 97,000 Mudra beneficiaries who took loans between April 8, 2015 and January 1, 2019. A report published in the Indian Express quoted sources as saying that the report will not be made public for another two months, that is, till after the Lok Sabha elections. The official reason cited are “errors” and “anomalies” in the methodology used for the jobs survey.[xi]

 

The MUDRA programme was launched in April 2015, and provides loans at low rates for people to set up small business and in order to generate jobs through self-employment. Last August, the Department of Financial Services had stated that around 90% of the loans fell in the lowest category of under Rs 50,000. Clearly, this amount too measly for any serious, even if small, entrepreneurial venture, and so obviously, job creation under the MUDRA scheme about which PM Modi himself has been making such tall claims must be negligible.[xii]

 

Given the audacity with which the Modi Government has been manipulating / suppressing all uncomfortable data, it is obvious that the MUDRA survey results would have also told a similar story of job losses and joblessness, and so the Modi Government has suppressed this report too.

 

After suppressing all these official surveys that would have revealed the distressing state of unemployment in the country—to give just one anecdotal evidence, around 1.9 crore candidates, including some with PhDs, applied when the Railways advertised 63,000 low-level and mid-level jobs last year[xiii]—the Prime Minister and his cabinet ministers are now giving speeches all over the country making wild claims about millions of jobs having been created during the past five years. If indeed this is true, what was the need to suppressing the survey reports—by statistical bodies that are considered to be among the best in the world (that is, before the Modi Government set about destroying them).

 

Does the Govt Care About Data Integrity Anymore?

 

Another important statistic that the government has manipulated / suppressed is farm suicide data. First, soon after coming to power, in 2014 itself, the Modi Government got the National Crime Records Bureau (NCRB) to make major changes in its methodology because of which a majority of farmer suicides got shifted to new or revised categories in NCRB data tables. Because of these new parameters, the number of farmer suicides in 2014 fell to 5,650, which was less than half their 2013 figure of 11,772. On the other hand, there was a spectacular increase in suicides recorded under the category “Others”, from 24,809 in 2013 to 41,216 in 2014. But even with these new diluted parameters, in 2015, the number of farmer suicides crossed the 8,000 mark, recording a whopping increase of 40% over the 2014 figure of 5,650 suicides. After that, further release of data on farmers’ suicides stopped! On December 18, 2018, Union Agriculture Minister Radhamohan Singh unashamedly told parliament that the NCRB, which collects such data, has not published figures of farmer suicides since 2016.[xiv]

 

Likewise, the Modi Government got the Reserve Bank of India (RBI) to suppress data about the quantum of demonetised currency that had returned to the banks. The RBI normally releases data on cash with the public in its fortnightly bulletins. Indeed, it did so until mid-December 2016, after which it has suddenly found itself incapable of completing the task of counting the cash returned in demonetisation; it kept claiming that it was still counting the notes that had returned. Finally, after more than 20 months, it finally declared on August 30, 2018 that the counting had been completed and that 99.3% of the junked Rs 500 and Rs 1,000 notes have returned to the banking system.[xv]

 

This manipulation of statistical data by the Modi Government has gone to such extremes that on March 14, 2019, a group of 108 eminent economists and social scientists from across the globe issued an open statement expressing concern about it. They emphasise the fact that economic statistics are a public good. Policy formulation will become difficult and faulty in the absence of data or when the data is wrong or insufficient. Not only that, credible economics statistics are a vital necessity for informed public discourse in democracies where citizens seek accountability from its government. They go on to say: “For decades, India’s statistical machinery has enjoyed a high level of reputation for the integrity of the data it produced on a range of economic and social parameters. It has often been criticised for the quality of its estimates, but never were allegations made of political interference influencing decisions and the estimates themselves.” However, lately, Indian statistics and the institutions associated with it have “come under a cloud for being influenced and indeed even controlled by political considerations. . . . Any statistics that cast an iota of doubt on the achievement of the government seem to get revised or suppressed on the basis of some questionable methodology.”  Because of this, the “national and global reputation of India’s statistical bodies is at stake.”[xvi]

 

More recently, Raghuram Rajan, who has served as Governor of RBI during the first three years of the present Modi regime, and was also formerly the Chief Economist of the IMF, and therefore definitely cannot be called a “compulsive contrarian”—words used by Arun Jaitley to dismiss the statement of the 108 economists and social scientists mentioned above—in an interview with CNBC–TV18 stated that he is “in the camp that has no idea what the statistics are at this point.” He stated that “a revamp” was needed “to really figure out what India’s true growth rate is”, and called for an impartial body to look at the numbers.[xvii]

 

Unfortunately, we have a government at the Centre that is not concerned with integrity of data anymore, so it is not bothered about the true growth rate, or the true unemployment rate, or the true poverty rate . . .

[i]
      Sona Mitra, “The Indian Employment–Unemployment Surveys: Why Should it Continue?”, August 13, 2018, http://www.cbgaindia.org; Rosa Abraham, Janaki Shibu and Rajendran Narayanan, “A (Failed) Quest to Obtain India’s Missing Jobs Data”, February 1, 2019, https://thewire.in.

[ii]    “Survey Discontinued, Centre Clueless About Unemployment”, March 6, 2018, https://www.dnaindia.com.

[iii]   Rosa Abraham, Janaki Shibu and Rajendran Narayanan, op. cit.; Soma Mitra, “Why the NSSO Employment Surveys Shouldn’t Have Been Done Away With”, August 25, 2018, https://thewire.in.

[iv]   Mahesh Vyas, “1.5 Million Jobs Lost in First Four Months of 2017”, July 11, 2017, https://www.cmie.com.

[v]    “National Statistical Commission”, https://en.wikipedia.org.

[vi]   James Wilson, “Lies, Deceit and Invented Truths in the Modi Regime”, February 10, 2019, https://www.telegraphindia.com; “2 More Members of NSC Quit on Feeling Sidelined”, January 30, 2019, https://economictimes.indiatimes.com.

[vii]  James Wilson, ibid.; Rosa Abraham, Janaki Shibu and Rajendran Narayanan, op. cit.

[viii] Devangshu Datta, “Voters Need Jobs, Not Leaked Jobs Data – And that is BJP’s Real Problem”, February 1, 2019, https://scroll.in.

[ix]   “Jobs Data Report ‘Final’, NSSO Reports ‘Never’ Cleared by Cabinet: Experts”, February 1, 2019, https://www.newsclick.in; “Jobs Dipping Amid 7.5% Growth?”: Arun Jaitley Junks “Unverified” Report”, February 1, 2019, https://www.ndtv.com.

[x]    James Wilson, op. cit.

[xi]   “Even Mudra Job Survey Data Put in Deep Freeze”, March 14, 2019, https://indianexpress.com.

[xii]  “How Many Jobs did MUDRA Create? Modi Won’t Tell You Before Elections”, March 14, 2019, https://www.newsclick.in.

[xiii] Devangshu Datta, “Voters Need Jobs, Not Leaked Jobs Data – And that is BJP’s Real Problem”, op. cit.

[xiv] “Centre Has No Farmer Suicide Data Since 2016, Minister Told Parliament”, December 20, 2018, https://www.ndtv.com;  James Wilson, op. cit.; P. Sainath, “The Slaughter of Suicide Data”, August 21, 2015, https://frontline.thehindu.com; “Farmer Suicides Soar 42% to Over 8,000 in a Year, State Tops in Deaths”, January 6, 2017, https://timesofindia.indiatimes.com.

[xv]  “99.30% of Demonetised Money Back in the System, Says RBI Report”, August 30, 2018, https://economictimes.indiatimes.com; Devangshu Datta, “How Trustworthy is India’s Economic Data? Does the Modi Government Care About it Anymore?”, July 31, 2018, https://scroll.in.

[xvi] “Economic Statistics in a Shambles”, March 14, 2019, https://cdn-live.theprint.in.

[xvii]      “Raghuram Rajan Raises Doubts About India Growing At 7%”, March 26, 2019, https://thewire.in; “Raghuram Rajan Raises Questions About India’s Growth Rate, Calls for Impartial Body to Clean Up Data”, March 26, 2019, https://scroll.in; B. Baskar, “It’s About Data Again”, March 21, 2019, https://www.thehindubusinessline.com.

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