Majority of problems with policymaking in India stem from the lack of data. To be able to accurately calculate, as well as interpret, statistics helps in understanding the health of the economy and deciding on the right policies.
In many ways, the Indian state is perhaps much more data-rich than it has ever been before. Yet, in many other ways, its statistical systems are failing to fulfil the needs of 21st century policymaking, with even basic data on industrial output, and gross domestic product (GDP), being routinely questioned by policymakers and analysts.
The once-famed statistical bodies, the Central Statistical Organization (CSO) and the National Sample Survey Office (NSSO), seem to struggle to produce timely and credible data on crucial aspects of the Indian economy and society.
For instance, until last month, GDP and IIP (Index of Industrial Production) data seemed like strange companions. If national accounts showed India growing at a world-beating 7%, IIP a leading economic indicator showed shades of a slump.
This divergence raised concerns: Could the data be trusted? Some even hinted the government was dressing up headline numbers, as supporting metrics like IIP, WPI, and merchandise exports were visibly going downhill. But in hindsight, the difference in the base year was partly responsible for the variance.
In this report, we reveal four proven strategies to picking multibagger stocks.
Well over a million copies of this report have already been claimed over the years.
Go ahead, grab your copy today. It's Free.
Moreover, India's GDP numbers have been receiving flak since a new calculation was introduced in January 2015. Overnight, India's GDP growth accelerated from 4.7% to 6.9%. It didn't make sense to many. Even Vivek Kaul pointed out in of the editions of Vivek Kaul's Inner Circle:
The need to clear the ambiguity stems from the diverging trends marked by various indicators. For instance, the ground reality in Asia's third-largest economy didn't exactly mirror the spectacular GDP growth in the last year.
The situation got so bad that even the Chinese - widely acknowledged as masterful economic data manipulators accused India of cooking up its GDP numbers.
However, the present National Statistical Commission is examining ways to revamp India's statistical system. Starting with CPI to GDP, to IIP and WPI now, India's statistical house has been set in order. The GDP data released recently factored in new series of IIP and WPI with change of base year to 2011-12.
But the government is aware the job is half-done and has directed efforts to introduce a producer's price index to determine ex-factory price, jobs data, the key metric followed globally and an MSME (Micro, Small and Medium Enterprise) index to complete the data pool.
So, can we expect our existing statistical systems to rise to the challenge? We believe the statistical system needs a lot more resources, both in terms of money and manpower to show what the real picture is.
For information on how to pick stocks that have the potential to deliver big returns, download our special report now!
Read the latest Market Commentary
What else is happening in the markets today? Dig in...
PersonalFN analyses the features of ITI Mid-Cap Fund and explains the potential this fund has to offer to its investors.
In today's video, I'll discuss why thew stock market went up on Wednesday, 24 February 2021, when the NSE had to shut trading due to a technical glitch.
You my personal trading checklist and you will be well on your way to making it big as a trader.
In this video, I'll show you how to get started on the path to daily trading profits.
Timely review of your investment portfolio is the key, to enable stable returns and work towards your envisioned financial goals during various market phases.
More Views on NewsLast time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.
In this video, I'll cover your queries on intraday trading and also share my view on how to decide stop losses and target prices.
A look at what India's top equity mutual funds bought and sold in January 2021.
Do you enjoy reading Tesla and Bitcoin stories? Here's a not so famous small-cap stock to profit from the rise of EVs.
More
Equitymaster requests your view! Post a comment on "Why Policymaking is Such a Nightmare in India". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!