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Is the unreliable government data a cause for worry?


Is the unreliable government data a cause for worry?
The increasing regularity with which government data is going awry, is worrisome, especially for those taking informed decisions. Late last week data from the Commerce and Industry Ministry said the eight core sector industries recorded a growth of 4.6 per cent in May on the back of surge in cement and coal production. But within a few hours, it was changed to 3.8 per cent.

The growth in the cement sector, which showed 22.1 per cent expansion in May, was later changed to 11.3 per cent. It's another goof-up and the commerce and industry ministry has initiated an internal exercise to find out the reasons behind the erroneous data in the first instance.


A few months earlier in April, the then Finance Minister Pranab Mukherjee was baffled and with him millions of investors and analysts when the IIP data was revised.

"I can understand if there is an error in calculating 0.1% of 0.2 %, but a revision from 6.8% to 1.1% is totally baffling," Pranab said referring to the release of erroneous data.

The government back then had to revise the Index for Industrial production data for January downwards from 6.8% to 1.1%. It seemed there was a huge error in reporting sugar production. A press release attributed it to the directorate of sugar in the ministry of consumer affairs, food and public distribution. To drop the IIP by a huge 570 basis points, means the person collating the sugar data, may have seen a million sugar bags, instead of one.

In December last year, the government admitted that the export data was inflated by a staggering $9 billion for the April-October fiscal. That's a colossal Rs 45,000 crores at the current dollar rate of Rs 50. A few 100 crores is acceptable, but Rs 45,000 crores is simply whopping! It seems there was a data entry error.


"This is a goof-up and there is no harm conceding a mistake," the Commerce Secretary, Dr Rahul Khullar, had then remarked.

Government data over the last few months, has increasingly become unreliable. Anybody wishing to take informed decisions based on government data should wait awhile, as data revision could be a possibility.

Read more about: iip
Story first published: Monday, July 2, 2012, 8:59 [IST]
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