By Adhirath Sethi Nov. 30, 2018
GDP is to economists what e=mc2 is to physicists, or the “Single Ladies” dance is to Beyoncé fans. But how does one trust the figures? There is the issue of reported data, the methodology, and the unorganised economy. It’s like when my friend tells me he earns less than one lakh rupees a month and then comes to pick me up in a Bentley
Anyone who has studied economics and escaped unharmed can testify to two things. First, it’s not so much the course fees, but the years of therapy afterwards that really burn a hole in one’s pocket. And second, that Gross Domestic Product is among the most important concepts you are expected to grasp.
GDP is to economists what e=mc2 is to physicists, or the “Single Ladies” dance is to Beyoncé fans. We claim to know everything about it but ask for a demonstration and all you’ll get is someone standing with their hip at an odd angle doing the “lightbulb”. Yes, even the physicists.
This is not entirely surprising. Like the “Single Ladies” dance, the GDP is both complex and mildly seductive. Calculating our GDP number is an unenviable task involving the collation of thousands of little bits of information from around the country. Think of it like assembling an iPhone, except instead of exploited Chinese workers, each component is created by a government babu, before the device is assembled in your local Mantralaya. Now ask yourself: How safe would you be feeling buying said iPhone without a two-year extended warranty? This is roughly how safe we should feel with India’s GDP numbers.
The problem with the GDP number is that it’s not just a metric. It is the metric. It is the number the government holds up to show what a great job they’re doing with the economy. It is the number that allows them to thump their 56” chests and declare: “Hey! Look at all the money we’re making. Let’s go spend it all on statues!”
It’s difficult to imagine that there isn’t some conflict of interest here. Because regardless of how we feel about caste, cows, or toilets, nearly all is forgotten the moment the GDP numbers look good. Why wouldn’t the government want to tweak that number, especially with elections bearing down on us?
The 8.2 per cent figure that they’re screaming about from atop the Statue of Unity is only rosy because last year, around this time, the number was 6.6 per cent.
Apart from the reported data – collated by people of the the same calibre as the ones who refuse to accept that I am male, despite all the pictures I sent to support my Aadhar application – there are the unreported numbers. India’s unorganised and/or black economy is so spongy that no one really knows what the correct figures are. It’s like when my friend tells me he earns less than one lakh rupees a month and then comes to pick me up in a Bentley. Sure, we’re still friends (he lets me drive his Bentley), but only an idiot would assign any weightage to his declared income.
And even if we somehow accept that all the data is as crisp and clean as a newly printed ₹10 note (#UgliestCurrencyInTheWorld), there is still the issue of methodology. We can’t get into specifics here, but let’s remember that in 2015, our GDP number got a boost thanks to some nifty re-calculation by the government. Suddenly cow dung (and indeed, all dung) had value and was adding to our economic output like never before. The irony that it took nearly 70 years of independence for Indian politicians to realise that BS had monetary value was one of the highlights of that year. While we can accept that any methodology does require refining now and again, the timing of this recalibration to coincide with exactly one year of the current government in power had all the subtlety of a pompous bull in a Maharashtrian slaughterhouse. Effectively, there’s little to stop the government from now declaring that the entirety of Bangalore’s lakes be re-valued as fuel, because they’re fully combustible.
The other thing about the GDP growth number is that it’s relative to the previous year. The 8.2 per cent figure that they’re screaming about from atop the Statue of Unity is only rosy because last year, around this time, the number was 6.6 per cent. A smaller base last year means everything looks proportionally bigger this year (there’s an overcompensation joke here somewhere). A lot of this effect can be attributed to the double whammy of demonetisation and GST. While the jury is still out on the long-term impacts of these measures, it’s no mystery that they shocked the economy and the nation more than the fact that three separate women agreed to marry Rahul Mahajan.
The irony that it took nearly 70 years of independence for Indian politicians to realise that BS had monetary value was one of the highlights of that year.
This isn’t anyone’s fault but our own. We’re so happy to be the fastest growing economy that we don’t really care what the number means, as long as we get to rub it in China’s smug face. It doesn’t occur to us that all the number is saying is: Last year was awful; this year, less so.
Perhaps it is sacrilege to question the GDP numbers. I could be way off, right? The data could be spot on; the methodology flawless. Maybe 8.2 per cent is exactly the right number and I’m just being bitter and sceptical because I don’t own any cows that churn out high-value dung 24/7. If the government says it’s 8.2 per cent, let’s just accept it.
Until, of course, the next government says otherwise.
That’s right. Not only are the calculations shadier than a ₹30 note, but now there’s no guarantee that the next government won’t just downgrade it all of a sudden. So, we’re supposed to rely on a number and make nation-altering decisions based on the same, knowing that two years down the line it could be declared fake.
As a close friend of mine who was recently arrested and had to hand his Bentley over to the IT department told me: “You just can’t trust anyone these days.”
Adhirath Sethi is a novelist based in Bangalore. When he is not writing satire, he dabbles in darkness. His latest book, Where the Hills Hide their Secrets, is a product of such dabbles..