A sharp dip in the industrial growth figures for June to 5.8 per cent from a provisional estimate of 7.1 per cent has made economists take the July figures with a pinch of salt. Most economists are looking at a downward revision in the latest figures, which peg industrial growth at 13.8 per cent in July.
“I feel the way data are collected, one has to wait and watch for the final figures for a better picture,” said Rupa Rege-Nitsure, chief economist with Bank of Baroda.
Chief Statistician of India T C A Anant explained that the sharp revision of 1.3 percentage points in the June numbers was due to lag in response from various industrial units from whom the data are collected.
“I will not comment on the specifics of the latest revisions, but generally the revisions are due to delayed responses from the industrial units. We keep the window open for revisions for an additional three months,” said Anant.
Even though there has been a sharp dip in June figures, Anant said it was unlikely to affect the first quarter GDP growth figure of 8.8 per cent, which, however, would see three revisions in the current financial year.
“I do not see it impacting the first quarter growth figure of 8.8 per cent in a very significant way. It is very early to comment on it,” he added.
Economists also did not perceive a significant downward revision in the first quarter GDP growth figures due to drop in industrial growth in June, as the samples used for GDP were more widespread than the IIP sample.
In the latest industrial growth figures, capital goods have seen an increase of 63 per cent which was termed “unsustainable” and a “blip” by analysts.
“The capital goods series remains one of the most volatile components within the Index of Industrial Production, as it suffers from a significant amount of lumpiness,” said Shubhada Rao, chief economist, YES Bank.
Though Indian statistical data are comparable to the best in the world, it has recently come under sharp criticism due to wrong use of deflators in the first quarter national accounts’ demand side indicators.
The response rate for provisional figures of lead statistical indicators in India is in the range of 25-60 per cent. The wholesale price index has the lowest response rate of 25 per cent for the provisional figures, while the rest are copied or extrapolated from previous figures.
The National Accounts that contain the GDP growth figures are currently the most accurate statistics in the Indian statistical canon.