Column: Numeralatory

Written by Meghnad Desai | Updated: Sep 30 2013, 07:36am hrs
When John Kennedy was contesting the presidential election against Richard Nixon, he argued that a missile gap had opened between USA and USSR and that indicated the fault of the Republican administration and if elected he would correct the problem. He won the election but it turned out there was no missile gap. It was a made up charge which just seemed plausible.

Numbers are powerful weapons of political rhetoric. The UK has now the Office of Budget Responsibility (OBR) which polices the use of official statistics by the government. The Office of National Statistics (ONS) recently upbraided Prime Minister Cameron for misrepresenting the numbers on unemployment. The OBR checks that the Chancellor does not create an impression of more growth than the numbers justify. Even better has been the contribution of the Bank of England about its inflation forecasts. They are regularly published with their confidence intervals shown explicitly. This fan diagram has become a staple of policy debates. A whole generation of politicians has been educated about the penumbra of uncertainty attaching to any and all statistical estimates.

One almost wishes that the Election Commission would do similar policing of the use of statistics during election campaigns. We had the recent example of Narendra Modi contrasting the GDP growth of 8.4% under BJP/NDA and 4.8% under the UPA2 . As numbers go, these are interesting only due to the juxtaposition of the digits 4 and 8. Yet P Chidambaram accused Modi of having a fake encounter with statistics. As the dispute escalated, Yashwant Sinha accused Chidambaram of terrorism with statistics. One side accused the other of overstating the GDP growth rate by taking one year and not the five year average. As the UPA average for 2004-09(8.4%) is better than the BJP/NDA for 1998-2004(6%), the argument was that by not stating it Modi had falsified the situation. But the numbers as such were not false; they were just point estimates rather than averages.

Why should there be disputes about numbers which are easily checkable The number 8.4% was claimed to have been published by UPA1 in its Economic Report for 2003-2004. It was claimed that the number was adjusted upwards from 8.2 to 8.4. Numbers get revised upwards or downwards. Economic statistics are fragile and very hard to define accurately anywhere within the range as small as 0.2 or even 0.5. Recently the US Department of Commerce recalculated all the GNP numbers back to 1929.

Indian politicians and economists display a strange faith in the numbers and trust them as exact to the last decimal point. In an economy with a large black economy sector, it is hard to imagine that we know what Indias GDP was even in nominal terms to within 30% of its true value. We know that the numbers on consumer spending among the rural and urban households from the CSO show very different levels of spending as compared to the NSS data which are used to measure poverty. Poverty estimates themselves raise a ruckus whenever published as the opinions about their true value range widely as between the lower 20s and up to higher 70s in percentage terms. There is a political compulsion even on part of the Ruling Party to overstate poverty numbers and resist any idea that there has been any reduction in poverty despite at least twenty years of high GDP growth. It is indeed as if the Congress Party has an auto-critique of its performance over the last sixty seven years of which all but about ten have been under its rule.

Why do politicians seem to be keen to use numbers but not believe in them Or is it that they only like numbers which serve their political purpose regardless of their accuracy Do they need education in the way the numbers are estimated and the fragility of all numbers Should India not have something like the OBR or ask the CSO to take on the powers that the ONS has in the UK

Alas, official institutions have been so corrupted and suborned by politicians that it is unlikely that any such precedent can be established whereby an official institution can correct and upbraid politicians for inappropriate use of statistics. Numbers are going to be bandied about on Human Development and malnutrition and the situation of Muslims in Gujarat and so on. Of course, they are part of the rhetoric, but that does not mean politicians should be allowed to go on a rampage with inappropriate language. The use of words like fake encounter or terrorism equates the misuse of statistics (if such it is) to a criminal act. That is the road down which the sanctity of statistics will be destroyed.

It may be that India Inc should take matters in hand and establish a neutral body to check and monitor the production and use of statistics. We have a Right to Trustworthy Statistics ( RTS).

The author is a prominent economist and Labour peer