Data errors, of huge magnitude, are par for the course by now, when it comes to the IIP, GDP or even WPI. Capital goods, for instance, have been such a volatile component of IIP, many analysts routinely remove capital goods data while analysing IIP trends—in July 2011, for instance, removing insulated cables and wires from the index saw capital goods rising just 0.3% instead of the 63% reported. The problem then spread to other data, such as that on exports. In the case of the critical CAD, where each dollar seems to be critical nowadays, you have an unresolved difference between DGFT and petroleum ministry data. In Q1FY14, the petroleum ministry estimates India imported $36.35bn worth of petroleum products while the commerce ministry puts this at a higher $42bn. Some months ago, the government quietly lowered its estimates of exports for FY11—copper exports were cut by half and passenger cars by around a fifth while raising miscellaneous exports over three times to make good the difference. This followed a research report from Kotak which found that while engineering exports had risen from $38bn in FY10 to $68bn in FY11, exports of the country’s top engineering firms had risen just 11% in rupee terms in the same period.
It now turns out, the CAG has discovered, in the case of grants-in-aid in FY12, the government’s finance accounts showed plan grants at R2.42 lakh crore while it was recorded as R2.93 lakh crore by Controller General of Accounts’ e-lekha system and R3.27 lakh crore by Central Plan Scheme Monitoring System (CPSMS). Getting IIP wrong was bad enough, but given it is based on a survey, this was still acceptable. How can grants-in-aid data be so incorrect?