Monday, 30th October 2017

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The credibility of the government is bound to plummet

Lingering confusion over the budget and the suppression of economic data are usually not expected in an open democracy

  • Published 1.02.19, 8:59 AM
  • Updated 1.02.19, 8:59 AM
  • 2 mins read
Prime Minister Narendra Modi attends the Budget Session of the Lok Sabha at Central Hall of Parliament, in New Delhi on Thursday, January 31. Media reports claim that during 2017-18, unemployment has been at its highest in 45 years, due to demonetisation PTI

There is a tradition of the Union government presenting a state of the economy report contained in the Economic Survey just before the annual budget. It has been announced that this year the state of the economy report will not be presented. This being the last full fiscal year of the current government, the finance minister is expected to announce an interim budget with a vote-on-account to facilitate essential expenditures. Hence, new tax and expenditure proposals are not expected. It ought to be left to the new government to do so later in the year. This year has been a year of confusions as far the budget is concerned. There was a perception that the finance ministry was going to present a general budget containing major announcements. Arun Jaitley is away for treatment and a colleague has been given charge. So it was quite surprising that there was talk of a general budget. Subsequently, it was made clear that the budget would indeed be an interim one. However, whether new proposals will be presented or not will be known only after today’s budget speech.

Amidst this confusion and lack of clarity on the nature of the budget and announcement of new proposals, there was another piece of news that was quite alarming. Members of the National Statistical Commission resigned, claiming that an important piece of macroeconomic evidence about the state of the economy was being suppressed because it was not pleasant. This was the unemployment survey conducted for this year and made ready in December 2018. It is claimed by a section of the media that the report has bad news on unemployment. The leaked data suggest that during 2017-18, unemployment had been at its highest in the last 45 years, with demonetisation having destroyed a significant number of jobs and livelihoods. Suppression and manipulation of data are usually not expected from openly democratic governments. However, the National Democratic Alliance has been singularly prolific in changing measures, altering past data, and suppressing inconvenient statistics. The unemployment survey results are the latest instance of such suppression. It is the first comprehensive employment survey done by a government agency since the NDA came to power. Postponing the publication of the Economic Survey is also an indication of discomfort with data that reveal the failures of the government’s economic policies. The credibility of the government is bound to plummet. Any data from government sources will be suspect.

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