Last month, India’s Finance Minister Arun Jaitley rubbished concerns, raised by a group of what he referred to as “so-called economists”, over the integrity of economic data being published by the Modi government. While calling into question the credibility of the group—which comprises a number of qualified economists of international repute—the Finance Minister also said that the same data is acceptable to credible international institutions like the International Monetary Fund (IMF) and the World Bank. And then, a twist of irony: Not even a month later, Gita Gopinath, Chief Economist at the IMF, has raised her own concerns over how India calculates its GDP (Gross Domestic Product), asking the government to fix the issues in its methodology.

India’s macroeconomic data is under a cloud, one that has been gathering over the last four years. Firstly, as early as 2015, the Modi government not only changed the base year for benchmarking GDP, but also changed the way the GDP is calculated. Secondly, in November 2018, the government recalibrated its own GDP estimates of previous years: While retrospectively lowering the growth rates of the erstwhile UPA government, in effect, it boosted its own average growth rate, with the demonetisation year appearing at the top of the charts. Thirdly, in 2019, the government refused to officially release the results of the National Sample Survey Office’s Periodic Labour Force Survey for 2017-18 (the year following demonetisation).

As the government held back employment data, two senior members of the National Statistical Commission (NSC), including the acting chairman, resigned in protest. And in response to the criticism faced by the government on the issue of jobs, India’s Minister of State for Labour claimed that “Employment surveys don’t matter, employment has gone up.”

Until credible macroeconomic data derived via transparent statistical methods is made fully available in the public domain, the only choice before the people of India is to accept the unsubstantiated and belligerent claims of those in power. For a country whose democratic institutions have been witnessing widespread denudation of authority and credibility, the institutions of statistical transparency may be just the most recent casualty.

Scientific economic indicators

The foundations of India’s statistical institutions are old and deep. Decades before the Modi government coined the tag ‘Institute of Eminence’ and handed it to a non-existent institute, India’s first Prime Minister Jawaharlal Nehru had been instrumental in setting up several centres of higher learning in streams like science, engineering, medicine, space exploration, and atomic research. But beyond science and technology, Nehru also understood the value of scientific methods in forwarding the country’s economic agenda. In line with this vision, the Indian Statistical Institute (ISI), founded in 1931, was recognised as an ‘Institution of National Importance’ by an act of Parliament in 1959.

ISI’s pioneering founder, Professor PC Mahalanobis, is widely acclaimed as the father and chief architect of Indian statistics. While he was a member of the Planning Commission, his eponymous model of economic development framed India’s second five-year plan. At times remembered as the person who introduced the idea of Big Data to India, long before the term had been conceived, Mahalanobis is also credited with setting up two of independent India’s apex statistical organisations: the Central Statistical Organization and the National Sample Survey.

The Central Statistical Organization—now called the Central Statistics Office or CSO—is responsible for, among other things, coordinating statistical activities in the country, preparing national accounts and macroeconomic aggregates such as the GDP, and generating industrial statistics via tools such as the Annual Survey of Industries.

The National Sample Survey or NSS, on the other hand, is a nationwide household survey usually conducted on an annual basis by the National Sample Survey Office (NSSO). Beginning in 1950 with a small sample size of 1833 villages in the first round, the NSS has attempted to systematize the assessment of the country’s domestic economy by collecting socio-economic data through scientific sampling methods. Over the 75 rounds of surveys conducted so far, its processes and sample sizes have progressively scaled up, and its early goals of collecting data about household consumption and employment-unemployment have been supplemented with additional themes such as housing conditions, literacy, health and sanitation.

The employment-unemployment surveys have been conducted as a part of the NSS every 5 years since 1972. They have been the primary sources of labour market data for the country, providing critical statistical indicators for use in planning and policymaking.

2012-2018: The hole in unemployment data

The last Employment and Unemployment Survey (EUS) was done with the 68th round of the NSS in 2011-12 during the UPA government’s tenure. Given its quinquennial periodicity, the next survey was due in 2016-2017. But, in June 2017, the Modi government announced that the EUS was going to be replaced with a new survey called the Periodic Labour Force Survey (PLFS). It claimed that the new survey would provide quarterly labour data for urban areas and annual data for rural areas, as opposed to data every 5-years in the EUS, and would also measure informal sector activity.

However, the results of the first PLFS never arrived. The government’s self-prescribed deadline expired in December 2018, triggering a chain of events that has left India with a big hole in its official labour market data from the year 2012 onwards.

First, the two NSC members resigned upon the government’s refusal to release the survey, compelling the government to clarify on January 30 that the results would be released later. The results of the PLFS were leaked by Business Standard on January 31. Then, in late February, the government reportedly junked the PLFS altogether and decided to use job creation data from the Labour Bureau’s survey of the Micro Units Development & Refinance Agency (MUDRA) scheme. But in mid March, it was revealed that an expert committee had discovered anomalies in Labour Bureau’s methodology for assessing the jobs created under MUDRA, following which the government would not be releasing this report until the polls were over. Something similar had happened earlier with another one of Labour Bureau’s surveys: the last annual employment-unemployment survey was withheld by the government for a long time, then finally leaked by Business Standard on January 11.

While the Modi government has not officially come forward with any scientific analysis of India’s unemployment data, it repeatedly offers truisms in support of the claim that “crores of employment opportunities” have been created since 2014. Sometimes anecdotal evidence is offered to back claims, like the Minister of State for Labour exhorting reporters to visit his own constituency to see the extent of employment generated, or Modi illustrating job creation through the example of a “pakoda shop in front of your office”. Lately though, in his speeches, the Prime Minister has been citing data from sources as diverse as Employees’ Provident Fund, Income Tax filings, National Pension System, and MUDRA.

But as all the leaked surveys demonstrate, India is in the middle of a major employment crisis. The post-demonetisation year of 2017-18 shows an unemployment rate of 6.1 per cent — the highest in last 45 years. This is bad news for the political party that won the 2014 national election on the promises of providing development and creating jobs.

The politics of economic data

More than 520 million Indians comprise the country’s labour force. There is some confusion even about the number of people joining the labour force every year, but one estimate pegs it at 4.75 million. 65 per centof our population is under the age of 35 and there is widespread concern that India’s demographic dividend could turn into a liability. The Modi government’s figures on GDP growth do not correlate well with the high rate of unemployment revealed by all the labour surveys. The country needs to not only address the suspicions over India’s GDP, but also restore the culture of transparency and scientific method in generating its macroeconomic indicators. Without such reliable indicators based on credible data, the country’s economic planning process cannot hope to generate the kind of growth required to address the ongoing unemployment crisis.

While the Congress party manifesto seems to have factored in the need to prioritise jobs creation in its election campaign, the BJP seems to have forgotten its own agenda from 2014 and is focussing more on muscular nationalism. Making a strong but shrill pitch for the BJP, Defence Minister Nirmala Sitharaman recently warned the nation that the country will be set back by 50 years if PM Narendra Modi is not voted back to power.

At this juncture, it can be argued that during the Modi government’s tenure, we have already been set back by 45 years as far as the unemployment rate is concerned. In any case, the Defence Minister’s rhetorical salvo could at best be described as an individual’s gut feeling, given that the information embedded in her claim is backed by no verifiable statistical data.