There are occasions when we have been critical of the data maintained by various Indian agencies and frequently suggested an overhauling of the system of compiling countrywise and sectorwise data of capacity, production and consumption. The sectoral output data of select industries which till a few years back was made available on an annual basis in the Economic Surveys and on monthly basis in the website of DIPP have since been discontinued and one is left with no alternative but to bank on a variety of sources for sector specific data. The change of the base year from 2004-05 to 2011-12 for WPI, IIP and correspondingly for estimating GVA and GDP (net of taxes) have updated and revised the data in tune with latest changes in the economy and industrial sectors. However, the absence of past years’ data prior to 2011-12 has made any analysis based on longer time series a difficult proposition. In view of another revision being talked of for changing the base period from 2011-12 to 2016-17, the non-availability of longer time series data appears to be a strong possibility.
For some of the critical sectors, the data furnished by the concerned members’ Association which may well fall short of a good coverage is taken into consideration for decision making purposes. The production data of steel, cement, automobile, mining and many others which are widely acceptable are regularly reported by JPC, CMA, SIAM, IBM, among others, and these are used for appropriate policy decisions with regard to capacity utilisation, production trend and bottlenecks as well as stimulus needed to rejuvenate sectors suffering from subdued demand. Sometimes it has been found that the reported production and inventory data vary from the data culled out of the indirect taxes paid on them. But that is a different story.
It is surprising to find that data differentials from different reputed sources are not only confined to the developing countries like India, it has now spread to the advanced countries also. The latest crude steel production data by major companies (first 50) released by World Steel Association (WSA) for 2016 differ from the data released by Metal Bulletin (first 125), a journal whose authenticity and reliability of data is well established. The top global steel maker in 2016, ArcelorMittal has produced 95.45 MT of crude steel as per WSA and has produced 90.80 MT according to Metal Bulletin, a clear gap of approximately 5 MT between these two figures.
This is surprising as production data of ArcelorMittal is released for the shareholders by the company and there is no scope for reporting two different production figures. Further, WSA has placed SAIL (14.38 MT) at 23rd place in terms of ranking of crude steel production in 2016, while Metal Bulletin has placed SAIL at 18th place with production figure of 16.12 MT. JSW Steel (ranked 21st) has produced 14.91 MT of crude steel in 2016 as per WSA, but according to Metal Bulletin, the production by JSW was 15.8 MT and ranked 19th. Among the other major Indian steel producers, Tata steel (consolidated) with production of 24.49 MT (24.19 MT) is placed at 10th place, Essar Steel with production of 5.22 MT is ranked 67th, JSPL with production of 4.8 MT is at 69th place and RINL with 4.2 MT crude steel production occupies 74th position. Discrepancy in steel data primarily arises due to definitional issues.
WSA defines finished steel to include tube fittings, drawn wires, forged wheels and axles, castings, forgings and seamless tubes which do not form components of finished steel as defined by JPC released data. Thus the difference in two sets of data is more reflected in finished steel and less in crude steel. WSA data reveal that India has exported finished steel of 10.3 MT in 2016 and imported 9.9 MT of steel. Both these figures exceed the figures reported by JPC by a big margin. In fact in 2015 also WSA data reveal that India is a net exporter of steel against official Indian data of net importer. The same discrepancy extends in reporting of apparent finished steel consumption of India.
In the latest World Economic Outlook brought out by IMF, the GDP growth for India is shown as 6.8% for 2016, while ADB in its latest Asian Development Outlook puts it at 7.1% for the same year. The recent revision in base year of WPI and IIP and the resultant changes in quarterly estimates of GDP in India may result in changes in 2016 GDP figure. Barring the frequent changes in the base year, one must take note of the definitional differences that would continue to exist in the data while interpreting the same.
By Sushim Banerjee -DG, Institute of Steel Growth and Development
(Views expressed are personal)