Review the parameters of progress
The problem with measuring economic growth is that not enough is known. It’s time that changed
The construct of democracy rests on informed choice and governance on informed policy. The answer to how India is doing depends on the stream of consciousness the response/responder is plugged into. There is the assertive boom or doom certainty of the WhatsApp world. Then there is the fog over the data landscape. Answers to critical questions are stranded in the arena of ricocheting claims and counter claims. And the trouble with measures of progress is that they are troubled. Very simply not enough is known.
The debate under the big tent is about job creation — and the 2014 manifesto underlined its need. Prima facie the $2 trillion economy averaged 7-plus per cent growth since 2014. How this translated into jobs is a mystery of sorts. Indeed, the Economic Survey for 2016-17 carries employment statistics dated March 2012 — a five year gap in which the economy has added over 60 million to the workforce.
How about correlating spend to job creation? Last year the Centre and the states together spent over ₹47 trillion — that is over ₹12,900 crore per day or roughly over ₹500 crore per hour. This year the central government will be spending ₹1.2 trillion on infrastructure projects that employ labour. Companies use available metric s to correlate investment and direct and indirect employment. What stops the government to estimate employment generation, wage days at the least!
Measuring progress is not just about estimating GDP growth. The Centre and states spend roughly ₹12 trillion — or ₹3,200-plus crore per day on education, health and social services. Take education. Barely four of 10 Class V students can read a Class II text, the poor are switching to private schools and over 33% of million-plus schools don’t maintain pupil-teacher ratio. What is the health sector allocation spent on? India has just 25,354 PHCs and the populace of 1.3 billion has barely a million registered allopathic doctors.
Is the state of education on the mend? Is health care improving? Is there a way to know? Reports on human development indicators, on social sector spend come with a lag, are incomplete and obfuscated with the terminology of approvals, matching spend and utilisation. If ministries were to present an outcome report before every budget they would at least be forced to assess outlays vs outcomes. Do we know if the tax payer is getting a better bang for his/her buck?
Data they say is the next oil. The govern- ment, which is the largest repository, is a reluctant investor in data exploration. Ergo analysis is trapped between the known, the unknown and the half-known. The half-known is illustrated vividly in the discourse on demonetisation. The Reserve Bank of India in its annual report gave an estimation of currency that it got back but told the Standing Committee of Parliament that it yet verifying the quantum of cancelled notes.
Park that under “exceptional case”. Take GDP growth. Scepticism has haunted estimates of GDP growth for three years. The dissonance is triggered by arguments over methodology, coverage and by divergence between indicators like falling bank lending and inferences. The invisible gorilla is the missing feel good factor. Now the slowdown has triggered a debate on whether the economy must be stimulated. The answer requires research and analysis of the data, interrogation of the past, whether the stimulus of 2008-09 led to boosting of employment and growth or bloating of debt. The call on whether or not to stimulate the economy is daunted by inadequate data about the informal sector and analysis on triggers for growth or slowdown.
This government announced big ideas, each promising to disentangle public need from structural Centre-state issues. The outcomes fall between the unknown and the unstated. The idea of 100 new smart cities has been reduced to a ceremony of naming and ranking, ease of doing business has been tripped by multi-layered permission raj and the much-vaunted e-platform for agricultural produce has scarcely persuaded investment of faith.
There is the gap between what governments know and what the people are told. More critically there is a gap in what the governments know and what they must know. To paraphrase a quote widely attributed to Galileo, there is an urgent need to measure what is measurable and make measurable what is not.
The festival of lights is a good occasion to think of how to reconfigure the measures of progress and light up the path of progress for those left in darkness.