"We have to rely on in-house information to gauge the market sentiment," said Ravi Uppal, managing director at L&T , echoing the concerns of the business community.
The announcement comes after the governor of Reserve Bank of India (RBI) D Subbarao raised similar questions about the data provided by the government. The Reserve Bank has been facing multiple problems due to the inaccuracies in data, be it the GDP estimates or choosing WPI as a basis to measure inflation instead of CPI.
The bank feels handicapped by the reliability, or lack thereof, the data supplied by the government and that if the government estimates of the GDP growth can vary as much as 40% within a year, then it could lead to some serious policy miscalculations.
In May this year, the RBI had lifted policy rates by 50 basis points after preliminary data showed inflation rate had accelerated to 9% in March, from 8.3% in February and that move received widespread criticism, as it was a sharp rise over the steady 25 basis points raise in the bank's earlier monetary actions. However, revised data showed March inflation at 9.7% and 9.5% for February thus justifying RBI's tightening.