Nobel Prize Winner Angus Deaton Says There Are Discrepancies in India’s Economic Data

[Saifullah Sani]

When India’s statisticians revised their economic output figures earlier this year, they vaulted the country to the top of the global growth leagues – and also prompted some to wonder about the soundness of their numbers.

Angus Deaton, who won this year’s Nobel Prize for economics, in part for his work measuring the poverty rate in India, says he hasn’t followed details of the latest changes in how India tallies its gross domestic product. But he said questions about Indian data are nothing new.

In an interview with news channel NDTV, he pointed to what he said were “very serious discrepancies” between numbers collected to calculate GDP and the information collected by the National Sample Survey on household spending and consumption.

“The national accounts are showing, you know, a huge increase in the amount that people have, year, upon year, upon year, and we’re just not picking it up in the household surveys,” Mr. Deaton said. That’s “a very, very serious gap and I think not enough is being done to address that,” he said.

Mr. Deaton, a professor at Princeton, said the differences raise doubts about the accuracy of growth numbers. “I’m sure some of that growth is exaggerated,” Mr. Deaton said. “I’ve no idea how much, it might be just a point or two. It might be a lot more than that.”

“One of the things you worry about with statistics is that growth is so much a flag under which recent Indian governments have flown,” Mr. Deaton said. “They are very much tied to that measure of success. That makes it very difficult for accurate data-keeping.”

India’s government statisticians say they their new numbers bring the country’s GDP calculations in line with international practices and give a more accurate measurement of the economy.

Nobel Prize Winner Angus Deaton Says There Are Discrepancies in India’s Economic Data - India Real Time - WSJ

 

[cyrusthevirus]

He did not get Noble price for developing a method to calculate GDP growth rate. This is like an award wining cardiologist without any experience in neurosurgery advising an neurosurgeon on how to perform brain surgery just on basis of receiving an award in cardiology.

 

[GreenApple]

..studying poverty rate of India can earn u nobel...???
..then I'm against the injustice done by the committee by not giving double Noble to Riaz haq and many of the moderators..
...pakistan should raise this issue at UN.

 

[Echo_419]

When India’s statisticians revised their economic output figures earlier this year, they vaulted the country to the top of the global growth leagues – and also prompted some to wonder about the soundness of their numbers.

Angus Deaton, who won this year’s Nobel Prize for economics, in part for his work measuring the poverty rate in India, says he hasn’t followed details of the latest changes in how India tallies its gross domestic product. But he said questions about Indian data are nothing new.

In an interview with news channel NDTV, he pointed to what he said were “very serious discrepancies” between numbers collected to calculate GDP and the information collected by the National Sample Survey on household spending and consumption.

“The national accounts are showing, you know, a huge increase in the amount that people have, year, upon year, upon year, and we’re just not picking it up in the household surveys,” Mr. Deaton said. That’s “a very, very serious gap and I think not enough is being done to address that,” he said.

Mr. Deaton, a professor at Princeton, said the differences raise doubts about the accuracy of growth numbers. “I’m sure some of that growth is exaggerated,” Mr. Deaton said. “I’ve no idea how much, it might be just a point or two. It might be a lot more than that.”

“One of the things you worry about with statistics is that growth is so much a flag under which recent Indian governments have flown,” Mr. Deaton said. “They are very much tied to that measure of success. That makes it very difficult for accurate data-keeping.”

India’s government statisticians say they their new numbers bring the country’s GDP calculations in line with international practices and give a more accurate measurement of the economy.

Nobel Prize Winner Angus Deaton Says There Are Discrepancies in India’s Economic Data - India Real Time - WSJ

I agree with him,Indian growth story is a sham & nothing else

 

[asad71]

I agree with him,Indian growth story is a sham & nothing else

That figures!

 

[FULL_METAL]

He did not get Noble price for developing a method to calculate GDP growth rate. This is like an award wining cardiologist without any experience in neurosurgery advising an neurosurgeon on how to perform brain surgery just on basis of receiving an award in cardiology.

I am sure all Pakistani members danced with joy when Obama won the award for peace

 

[Keel]

Prof A Deaton not just singles out India for his studies and research. He has been doing it on a global scale

Comment on “Counting the World's Poor,” by Angus Deaton
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Also he has adopted a different approach in linking the economy of a country with data obtained from a country's households

The Prize in Economic Sciences 2015 - Press Release

Consumption, great and small

To design economic policy that promotes welfare and reduces poverty, we must first understand individual consumption choices. More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics.

The work for which Deaton is now being honored revolves around three central questions:

How do consumers distribute their spending among different goods?

Answering this question is not only necessary for explaining and forecasting actual consumption patterns, but also crucial in evaluating how policy reforms, like changes in consumption taxes, affect the welfare of different groups. In his early work around 1980, Deaton developed the Almost Ideal Demand System – a flexible, yet simple, way of estimating how the demand for each good depends on the prices of all goods and on individual incomes. His approach and its later modifications are now standard tools, both in academia and in practical policy evaluation.


How much of society's income is spent and how much is saved?

To explain capital formation and the magnitudes of business cycles, it is necessary to understand the interplay between income and consumption over time. In a few papers around 1990, Deaton showed that the prevailing consumption theory could not explain the actual relationships if the starting point was aggregate income and consumption. Instead, one should sum up how individuals adapt their own consumption to their individual income, which fluctuates in a very different way to aggregate income. This research clearly demonstrated why the analysis of individual data is key to untangling the patterns we see in aggregate data, an approach that has since become widely adopted in modern macroeconomics.

How do we best measure and analyze welfare and poverty?

In his more recent research, Deaton highlights how reliable measures of individual household consumption levels can be used to discern mechanisms behind economic development. His research has uncovered important pitfalls when comparing the extent of poverty across time and place. It has also exemplified how the clever use of household data may shed light on such issues as the relationships between income and calorie intake, and the extent of gender discrimination within the family. Deaton's focus on household surveys has helped transform development economics from a theoretical field based on aggregate data to an empirical field based on detailed individual data.

 

[Donatello]

Wait for it......there are plenty of expert graduates in Modinomics here, who will disprove this guy and anyone else casting a doubt over superfluous Indian GDP growth

 

[My-Analogous]

He did not get Noble price for developing a method to calculate GDP growth rate. This is like an award wining cardiologist without any experience in neurosurgery advising an neurosurgeon on how to perform brain surgery just on basis of receiving an award in cardiology.

..studying poverty rate of India can earn u nobel...???
..then I'm against the injustice done by the committee by not giving double Noble to Riaz haq and many of the moderators..
...pakistan should raise this issue at UN.

 

[NKVD]

Wait for it......there are plenty of expert graduates in Modinomics here, who will disprove this guy and anyone else casting a doubt over superfluous Indian GDP growth

Yeah maybe all Top Global MLNC's are filled with such Expert's Too
India emerges top FDI destination leaving behind China, US in 2015 | business | Hindustan Times

 

[Guynextdoor2]

I think that at least a 6% to 7% growth has happened. But there may have been data fudging by Fenku to make it look more.

 

[Abingdonboy]

Mr. Deaton, a professor at Princeton, said the differences raise doubts about the accuracy of growth numbers. “I’m sure some of that growth is exaggerated,” Mr. Deaton said. “I’ve no idea how much, it might be just a point or two. It might be a lot more than that.”

Boils down to this, he has no way of quantifying the "exaggeration" (as he claims) but is willing to muddy the water anyway. It would be best if he had kept his mouth shut but this is an interview with NDTV- everything goes in India.

“One of the things you worry about with statistics is that growth is so much a flag under which recent Indian governments have flown,” Mr. Deaton said. “They are very much tied to that measure of success. That makes it very difficult for accurate data-keeping.”

So Mr Deaton is giving a motive to the GoI to inflate their own GDP figures here- buying political capital. EXCEPT the GoI has also revised the UPA 2's (previous GoI) growth rates UP also so now the BJP is in the business of helping their opposition?


I never heard this kind of dissent when the UK did exactly the same thing (revising their base of calculation) a few years back.

 

[Shinigami]

i disagree. there is only 1 nation on earth who has mastered the art of gdp growth manipulation for decades

 

[JOEY TRIBIANI]

Wait and watch .Now indians will start reacting as they know more then expert graduates . .

 

[Sky lord]

@Nilgiri your views please