There is too much discrepancy in GDP data to take it at face value

Discussion in 'Economy & Infrastructure' started by huaxia rox, May 17, 2012.

  1. huaxia rox

    huaxia rox Senior Member Senior Member

    Apr 4, 2011
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    There is too much discrepancy in GDP data to take it at face value - Economic Times

    The policy imperatives arising from slowing GDP numbers over the last year remain the same: contain the fiscal deficit, change the use to which borrowed funds are put from consumption to investment, stop drift and dither on decisions that guide private investment, show some courage to raise user charges so that sectors like power, petroleum, irrigation, etc, can be commercially viable.

    The big-ticket item here remains decontrolling diesel, kerosene and cooking gas prices while allowing parallel marketing by anyone interested in these segments, so that competition would eliminate assorted fictitious costs that pad prices today. For this, apart from permitting companies to enter independent retailing of fuels, the government would also need to put in place an open access policy on the infrastructure associated with petroleum retailing.

    That said, the latest national accounts data shows an alarming level of inconsistency that calls for remedial action. Manufacturing is supposed to have grown just 0.4% in the third quarter and 3.4% in the first three quarters together. At the same time, electricity is supposed to have grown 9%.

    Where is power going, if not to drive manufacturing? Why did net tonne km of goods movement by the railways grow 5.3% in the same period, if there was no growth in manufacturing? Why were people flying around (12.9% growth in passengers handled by civil aviation) and staying in hotels (growth of 9%), instead of staying put at home, ruing stagnant production?

    How could finance, insurance, real estate and business services grow 9%, if the wheels of industry had stopped turning? Trade, as a proportion of GDP, touched 54.5% of GDP in the third quarter of the current fiscal, moving up from 50% of GDP in the corresponding period last fiscal.

    Yet, cargo handled by ports is supposed to have declined 4.8% while cargo that moved by air declined 2.8%. Did we get such violent growth in export of services that overall trade grew while merchandise trade declined? Our software exports did well but performed no pole vaults. Overall, CSO has come up with a string of numbers that just do not hang together.

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