Data entry misleads India on IIP
Statistician revises January factory growth to 1.1% as against 6.8%; blames it on data entry mistake
India’s industrial production continued with its poor performance growing by 4.1 per cent in February led by a contraction in consumer durables. However, what raised concern was that government downgraded growth for January from 6.8 per cent to mere 1.14 per cent as earlier there was an error in data entry on sugar production.
“This error reduces the confidence in data. It makes decision- making more difficult for the policy makers,” said Mr D. K. Joshi, chief economist at Crisil.
The ministry of statistics and programme implementation said that at the time of compilation of the index of industrial production ( IIP) for February it was detected that during the compilation of the IIP for January the sugar production was wrongly taken as 134.08 lakh tonnes in place of the actual figure of 58.09 lakh tonnes. “This wrong figure was taken because of incorrect reporting by the directorate of sugar in the ministry of consumer affairs, food and public distribution,” said a statement by the ministry of statistics and programme implementation. Meanwhile, economists expect the weakness in the industrial production to continue for some more months.
Finance minister Pranab Mukherjee said, “These ( IIP) figures will have bearing on the monetary policy announcement scheduled for next week. The government along with RBI will take the required steps to revive activity in the economy.” He said that uncertainty in the global economy coupled with monetary tightening in the past have impacted investment recovery. He blamed negative growth in the consumer goods sector to considerable moderation in domestic demand. How- ever, he said that on the positive side capital goods output for February 2012 showed an expansion of 10.6 per cent on back of domestic investment recovery.
In February, the manufacturing sector, which constitutes over 75 per cent of the index, grew by just 4 per cent as compared to 7.5 per cent in the same month last year. Consumer goods contracted by 0.2 per cent per cent in February, as compared to the 13.4 per cent growth in the same month last year. Consumer durables which include goods like TV, fans, AC among other ontracted 6.7 per cent in February, as against robust 18.2 per cent growth in the same month last year.