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Has the Indian Economy Doomed, as propagated by Team B of Congress? CAs of the nation have answered it

by IRC-ADMIN - Mar 19 2019 10:46AM

131 chartered accountants from all across the country are debunking the narrative that will lead up to an ‘Award Wapsi 2.0’. This comes as a huge move to revert the baseless allegations propagated by motivated voices in the economist and social scientist community. All these years they were quiet, and at a time when the elections are near, they wake from their slumber throw muck based on irrelevant allegations to shame the government. Don’t you remember Amartya Sen, the Nobel laureate who said India would be worse if Modi assumes power before the 2014 elections!? Look where India has reached now, despite all such self-claimed intellectuals’ arguments before 2014 elections. Yet another elections and the same set or at least people representing the same set are yet again out in the open with the same old failed strategy. Through this article, IRC would like to expose the sinister plan of the Award Wapsi gang and see how these 131 CAs are countering this narrative.

BACKGROUND
Recently, 108 Economists and Social Scientists alleged that economic statistics in India are in shambles. They also alleged that there is political interference in the publication of data. They opined that in the past organizations like CSO and NSSO were enjoying high credibility but are now under a cloud. Disputing Government data is routine for experts around the world. However, it is unusual for a particular set to come together to discredit all data and long-standing institutions of eminence. The appeal seems even more devious as the data in respect of GDP, Poverty Alleviation, Ease of Doing Business are being duly published even by international agencies including World Bank, IMF, and many others. The international data and independent agencies have clearly confirmed the data being published by Government agencies.

The appeal is also alleging suppression of data which is 'inconvenient for the Govt,' while conveniently ignoring that the opposition and media are already playing their respective roles to the fullest in India. Changing of GDP base year is a regular feature. Instead of taking issue with specific areas, a general bunch of allegations has been made, which leaves one guessing about the motivation of the signatories. The allegations appear choreographed and resemble the previous “Award Wapsi” drama, which too was enacted just before a crucial state election. A political tendency is being developed to disown institutions. Even facts reported by the Armed Forces are being questioned against the national interest.

Between 1960 to 2014 India had been left behind by all its peers from Japan, China, Taiwan, Korea, Brazil, Thailand, Indonesia, Malaysia, Singapore, Russia, South Africa, and Sri Lanka in economic growth. None of these economists or social scientists ever made an appeal in those 54 long years that India is on a slow track and is being left behind. Now when India has become the Fastest Growing Economy in the world they are worried about the credibility of data. Is it their intention to scare Foreign Investors by creating doubts on the credibility of Data?

FACTS ON THEIR FACE
In their letter, while there has been no detailed proof for the allegations, a reference has been made about revision in GDP series post change in the base year to 2011/12 and the non-publication of NSSO labor force survey. It may have skipped their mind but the base years of the National Accounts Statistics series have been changed in Aug 1967, Jan 1978, Feb 1988, Feb 1999 and 2006. Such base year changes are made to ensure that data reflects the transition as well as the disruptions in an economy. The rebasing exercise which led to the change in GDP growth rates – the base year was changed from 2004-05 to 2011-12 – was set in motion by the UPA. The methodology for this was also approved by the UPA; that the numbers came out under NDA is just a coincidence.

The new GDP series introduced is compliant with the United Nations guidelines in System of National Accounts-2008 for the first time. It takes information for the corporate sector and has better estimates of the unorganized sector on unincorporated enterprises, as well as data on sales and service taxes. Evidently, a methodology in compliance with the United Nations Standard is shambolic as per the distinguished signatories. In a large country like India errors and omissions can happen while collecting and tabulating data. It may be recalled that a few decades back while calculating inflation, the price of Iron ore was not revised for years, and later when the omission was corrected it resulted in a huge spike in inflation. Data revisions are part of a healthy practice to balance between timeliness and accuracy. For example, all data sources have their bases changed at periodic intervals as well as a provisional and final data. e.g. The GDP data usually is revised five times before the final numbers are released.

The five revisions happen as First Advance, Second Advance, Provisional, First Revised, and Second Revised. Final GDP is revised after all these revisions, and this takes about three years. Such revisions are not statistics in shambles but a reflection of robustness of the process within the limitation of size and scale of data collection.

The fast pace of roads built, railway tracks laid, rural homes built, startups hitting the skies, the huge number of jobs created in services, deep and held back transformational reforms like GST unleashed, formalisation of the economy through demonetisation, loopholes and leakage in money transfer to the poor being plugged through Jan Dhan Bank Accounts and Aadhaar, the tremendous increase in market capitalisation, direct and indirect tax collection increase, ease of doing business-rank jumping from 142 to 77, India’s FDI inflow overtaking China, reduced interest rate on bank borrowings, the steep increase in tractor sales as a proxy indicator of agricultural development, introduction of insolvency and bankruptcy code leading to settlements of more than Rs 3 lakh crore, 'big boy' NPAs recognition and public auction of the same, a scandal-free government etc. - All of these have been conveniently ignored by our friends while writing their letter imputing motives. All this has helped India become the sixth largest economy in the world, the fastest ever jump, in the last five years. And if there is any doubt regarding this, then the signatories are welcome to take this up with the World Bank - an international agency backing this claim.
Most independent professionals have no doubt about the remarkable progress India has achieved in the last five years. We also believe that India is poised to move on a higher growth trajectory provided such politically motivated attempts to discredit India and dent its credibility and progress is appropriately countered.

THE STAKES DUE TO THIS PROPAGANDA

Capitalists and industrialists have praised Narendra Modi throughout his tenure for the stellar performance the country has shown under his leadership under the economic sphere. India under Modi has become one of the greatest attractors of foreign direct investment (FDI). In our previous articles, we had shown how the Modinomics has helped India achieve what seemed impossible before five years. From one among the fragile five economies to the top six in the world. India too has made considerable progress in many fronts like FDI, ease of doing business index, etc. 

Modi’s India is at stark contrast to UPA’s India; the latter had nothing to lose but this is not the situation now, the former has a lot to lose. If this propaganda of Award Wapsi reaches out of the country, it might cause considerable damage to the reputation of the country as an investors destination. It could affect the FDI flowing into the country heavily. What is even more concerning is the fact that this propaganda led by the opposition is being taken forward by the learned men of the country. They have easily fallen to the decoy of the opposition. At this time, it is the responsibility of every righteous Indian to debunk this campaign, just like how 131 of our chartered accountants have done. Any smear campaign to disfigure the reputation of the country not based on facts should oppose with utmost strength and unity. 

 

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