(Image Courtesy: Youtube)

 

“This government now realises that they need a boost of Viagra to do something about the economy. Now they want Rs 40,000-50,000 crore to inject into the economy. No nation can survive like this,” stated eminent lawyer-cum-Congress leader Kapil Sibal. He said so while mocking Modi Government’s loud thinking on economic stimulus.

Mr. Sibal is right because Viagra is addictive. It can hook the economy to ‘Yeh Dil Mange More’ mania. Recall UPA Government’s experience. It was forced to sustain the 2008 stimulus necessitated by the global meltdown for too long. It thus hit fiscal prudence for a six. 

Risk to fiscal health aside, economic stimulus often serves as fig leaf for crony capitalism. The Government of the day readily succumbs to lobbying by influential companies and sectors. It ends up doling out tax incentives and makes additional expenditures to bail them out of their own cup of woes.

Prime Minister Narendra Modi should get an indepth study on post-budget stimuli given to one sector or the other by different regimes since the Independence. It would certainly be an eye-opener for all.   

Is the talk of economic stimulus a ploy to bail out hand-picked sectors such as the influential telecom services providers that operate as elite clique called COAI?

 (Edited Image Courtesy: data.gov.in)

 

“Is the primary aim of a statistical service to provide the data the Government (that is, the current political leadership) requires or is its mission broader? The question is a real one,” says a United Nations Working Paper (WP) released way back in 1994.

Significance of this seminal work titled ‘Politics and Statistics: Independence, Dependence or Interaction?’ to Demonetization-hit India would become real to anyone who reads it with an open mind.  

WP contends: “a statistical service must find ways of being responsive to new or altered needs for data. At times such needs are explicitly articulated. At other times they must be inferred from current or anticipated political debates.”

This should ring in as wake-up call for Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MOSPI) that blissfully shunned the word ‘demonetization’ in its 15-page Press Note dated 28th February 2017. The same call should have stirred conscience of Ministry of Labour & Employment’s Labour Bureau (LB) which has not assessed the impact of demonetization on labour market. 

The failure of these two premier statistical organizations to collect data on demonetization’s impact is contrary to United Nations’ Fundamental Principles of Statistics that every NSO/statistical service is supposed to follow as its dharma. We discuss the significance of these principles in Indian situation later in this column. 

The computation of gross domestic product (GDP) has come under fresh, intense scrutiny. Stakeholders across the world are pitching for improvement in its quality & reliability.

The four major factors propelling the urge for GDP reform are: 1) persisting uncertainty over global recovery, 2) new developments in globalization of manufacturing and services, 3) widespread perception & contention among economists against GDP numbers of countries such as India & China and 4) the limitations of existing methods of estimating GDP discovered over the years. 

The stakeholders pitching for GDP reforms include multilateral institutions, national statistical organizations (NSOs) and leading economists. 

Reliability of GDP, which is most important macro-economic indicator of national accounts systems, is vital for managing global uncertainty. It is also crucial for government of each country to take appropriate policy action such as changes in tariff on products or tax incentives to improve the economy’s working. 

Countries largely claim to be measuring their respective GDP in keeping with in keeping with System of National Accounts 2008 (2008 SNA), a global standard released by United Nations Statistical Commission (UNSC).