In an unprecedented move, last week 108 social scientists working in India and abroad came out with an extraordinary statement decrying political interference over statistical data. They called for the restoration of “institutional independence” and integrity to statistical institutions.
“It (statistical machinery) was often criticised for the quality of its estimates, but never were allegations made of political interference influencing decisions and estimates themselves,” said the statement.
It further said, “Lately, Indian statistics and institutions associated with it have, however, come under a cloud for being influenced and indeed even controlled by political considerations”.
Trouble had been brewing on the data front ever since the government last year decided to junk the report by the statistical commission on the back series which had said that growth had topped 10 per cent twice during the 10-year UPA regime. The government then came out with another report which claimed that the average growth during the NDA-II regime was higher than the 10-year UPA period. Incredibly enough it revised the GDP growth for 2016-17, by 1.1 percentage points to 8.2 per cent, for a year in which the disastrous demonetisation was implemented.
“This seems to be at variance with the evidence marshalled by many economists,” said the social scientists in their statement.
More recently the government suppressed a jobs data report which had claimed that joblessness had touched a 45-year high last year. The report’s findings were leaked in the press. The government’s decision to bury the report prompted PC Mohanan, Chairman of the National Statistical Commission, and J Meenakshi, a member of the commission, to quit in protest.
It was in this background that the 108 social scientists decided to come out with a statement expressing concern over political interference and calling for restoration of statistical institutions’ integrity. The statement was nothing short of a stinging rebuke to the government.
The government’s reaction to the statement was on predictable lines. Finance Minister Arun Jaitley claimed that these social scientists had an “axe to grind” against the Modi government. He further said that 70 per cent of the 108 social scientists were “compulsive contrarians”. But going by his own argument, if 30 per cent of those who signed the statement are not “compulsive contrarians”, isn’t that a damning indictment of the government’s record on this front?
Interestingly, a day before Jaitley tore into these social scientists, a group of 131 chartered accountants, including two former presidents of the ICAI, came to the government’s defence and termed the social scientists’ stance “politically motivated”.
Under the banner of “CA for Nation”, these chartered accountants claimed that the social scientists were “unnecessarily” raking up this issue and scaring away foreign investors. Bizarrely, they questioned why social scientists did not raise the issue of data credibility during the 1960-2014 “low-growth” period and were, instead, raising these issues when India was on a high-growth path.
What these chartered accountants failed to see was that the GDP growth rate actually started looking up since 1991, when the economy was opened up and wide-ranging reforms were implemented.
Besides, the chartered accountant fraternity questioning the integrity and motivation of social scientists is a bit rich. In recent years when India was witness to several high-profile corporate scandals, starting from the Satyam scam in early 2008, the accounting fraternity’s credibility has been seriously dented.
The fact that both the in-house as well as external auditors either failed to see, or chose to look the other way, when accounts of some corporate entities were being fudged, made the government step in and put in place some much-needed regulatory checks.
The government has made now rotation of auditors mandatory. Every incorporated company must now compulsorily change its auditors every five years to comply with the Companies Act of 2013. This is done to protect shareholder interest and make sure the accounts presented are completely above board.
This is not to suggest that all auditors were “massaging” the numbers but, as corporate scams came tumbling out of the cupboard, the role of auditors did come under scrutiny.
Also the CAs’ claim that since they work with companies they have a better insight into the working of the economy than the economists and social scientists is nothing short of presumptuous.
With the elections barely three weeks away, the battle lines are being clearly demarcated. The “us versus them” divisions will only get sharper in the days ahead. Arun Jaitley’s new-found love for the term “compulsive contrarians” is an indication of this.