Reliability of GDP data

In terms of reliability of official data, India is getting dangerously close to Chinese territory. The year that witnessed demonetization, when 86% of the cash in circulation was declared as illegal tender overnight and which was perhaps one of the greatest assaults on private property in recent history, is now being touted as the year of highest GDP growth in the last eight years. This was the year when all other macroeconomic indicators took a nose-dive, but the GDP for that year has been inexplicably revised upwards to 8.2%, which has left everyone confounded.

Good policy-making requires reliable data. Collecting and publishing data has always been a difficult affair in India, given the magnitude of the task, compounded by the presence of a large informal and unorganized sector. We do not need deliberate manipulation and withholding of data to make the task even harder.

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