A question of statistics

If statistics do not lie then the Indian economy did extraordinarily well between 1994 and 1997. Latest data from the Central Statistical Organization (CSO) puts growth in gross domestic product (GDP) in 1996-97 at 7.5 percent. This rounds off an excellent economic performance in which annual expansion has averaged over 7 percent in the last three years. Never before has the economy grown so rapidly at such a sustained rate.

There have been occasions during the past half century when growth has been faster. But in all other cases, high growth came in years following a downturn, which puts a statistical gloss on the subsequent recovery. In addition to record growth, 1996-97 has also show the highest rate of savings ever recorded. The rate of investment is second only to the rate recorded in 1950-51.

Yet, there are many misgivings about these statistics. Since 1995, the CSO has frequently revised its estimates of GDP. All these revisions have raised the growth rate of the economy. The difference between the first and final estimates of growth in 1994-95 is almost two percentage points. Revisions of GDP data is not a new phenomenon, but the scale and direction of the CSO's recent alterations are unprecedented. It is therefore natural that the CSO's estimates are viewed with suspicion.

-- The Hindu, New Delhi