Commerce ministry begins inquiry into data fiasco

The Commerce and Industry Ministry has initiated an internal exercise to find out the reasons behind the goof up in the eight core sector growth data for May, which was revised within hours of the release to the media on Friday.

‘We have started an internal exercise to find out the reasons of problems in the data. My officers are on the job,’ a ministry official said when asked about the reasons for lowering of core sector data for May to 3.8 per cent from 4.6 per cent.

The official further said, ‘The Ministry of Statistics and Programme Implementation (MoSPI) should tell the reason behind the data issues.’

However, an official in MoSPI said, ‘We take data from the Department of Industrial Policy and Promotion (DIPP) for Index of Industrial Production (IIP). I will find out when we start revising figures for the forthcoming IIP numbers.’

While DIPP, which is under the commerce and industry ministry, is responsible for dissemination of Wholesale Price Index and core sector data, MoSPI collects data for national income and releases the IIP figures.

On Friday, in an afternoon statement, the commerce and industry ministry said that the eight core sector industries recorded a growth of 4.6 per cent in May on the back of surge in cement and coal production. But, within three hours, it was changed to 3.8 per cent. The growth in the cement sector, which showed 22.1 per cent expansion in May according to the first press statement, was changed to 11.3 per cent.

The eight core industries – coal, crude oil, natural gas, fertilisers, petroleum refinery products, electricity, cement and finished steel – have a weight of 37.9 per cent in the IIP.

There have been similar problems earlier as well in different sets of crucial data, and this issue has been raised even by Reserve Bank of India governor D Subbarao. Last year, the commerce ministry revised downwards its export data for several months. Similar errors were also noticed in IIP figures which had to be revised later, much to the embarrassment of the government.

There were also reports of error in the updated series of the Wholesale Price Index.

The government has set up a committee to revise the index to take into account structural changes in the economy since 2004-05.

The 31-member group, to be chaired by Planning Commission member Saumitra Chaudhuri, will suggest methods for ensuring smooth flow of data and also to look into the possibility of having a single agency for collecting data for WPI and IIP.
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