Recently, 108 economists and social scientists raised doubts on the credibility of government data. They spoke about “restoring” the “institutional independence” and integrity of statistical institutions. In response to that 131 prominent chartered accountants have written a letter debunking the ‘award wapasi 2’ attempt. Some of the signatories on the letter include Manipal Global chairman T V Mohandas Pai, Enam founder Vallabh Bhansali, India Infoline Group Founder and CMD Nirmal Jain, Kotak AMC MD Nilesh Shah, Haribhakti & Co. Partner Shailesh Hirabhakti and Anand Rathi Group CMD, Anand Rathi.
The letter, in its entirety has been presented below:
Recently, 101 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 organisations 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 government’, 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?
Some Indian banks indulged in massive evergreening of loans between 2008 to 2014. Equity markets were correctly predicting massive under reporting of NPAs for years and majority of PSU banks were trading below book value for years. Yet none of these eminences made an appeal to give credible NPA data. This raises doubts as to their true intentions, and one ponders whether this concern emanates from the upcoming elections.
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 labour 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 unorganised 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 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 is normally 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, start ups 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 5 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 last 5 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.
We appeal to the professionals around the world to come together to present the true picture of India and counter baseless allegations with political motivations.
List of Signatories:
1. ABL Srivastava, Former MD, NHPC
2. AK Sabat, Partner, AK Sabat & Co.
3. Aastha Jain Aggarwal, Partner, VGM & Co.
4. Adesh Gupta, ex CFO, Rashi Industries Ltd.
5. Ajay Bahl, Founder & Partner, AZB Associates
6. Akhilesh Jain, Independent Director, Mineral Exploration Corporation Ltd.
7. Amarjit Chopra, Former President, ICAI
8. Amit Jain, MD, GTI Capital Advisory (India) LLP
9. Anand Rathi, CMD, Anand Rathi Group
10. Aniket Talati, Council Member ICAI, Ahmedabad
11. Anil Bhandari, Council Member ICAI, Mumbai
12. Anil Gupta, Member Advisory Board, BVSS
13. Anil Saxena, ex CFO, Religare
14. Anil Sharma, Independent Director, UCO Bank
15. Anil Sharma, CFO, Heidelberg
16. Anuj Goyal, Council Member ICAI, Ghaziabad
17. Anup Dhanda, Director (Finance), Orient Craft
18. Anoop Joshi, Group CFO, SRF Ltd.
19. Ashok Batra, Author – Indirect Tax and GST
20. Avineesh Matta, Independent Director, IRCON & Former President, All
India CA Society
21. BR Somani, Former CFO, Jaipuria Group
22. B Thiagarajan, Founder & Partner, B. Thiagarajan and Co.
23. Bhagwan Das Gupta, Former Chairman NIRC, ICAI
24. Bimal Jain, Author and Expert – Indirect Tax and GST
25. Binu Nanda, Gambhir Nanda and Associates
26. Chandrashekhar Chitale, Council Member ICAI, Pune
27. DC Garg, Partner, D C Garg & Co.
28. DK Aggarwal, Vice President, PHD Chamber of Commerce
29. DS Rawat, Author & Partner, Bansal & Co.
30. Dayaniwas Sharma, Council Member ICAI, Hyderabad
31. Deen Dayal Aggarwal, Independent Director, Bank of Maharashtra
32. Deepak Gupta, Former Council Member, ICAI
33. Dheeraj Khandelwal, Council Member ICAI, Mumbai
34. Dinesh Gupta, Partner, OP Tulsyan & Co.
35. Dinesh Kumar, CFO, Wizcraft
36. Dinesh N Jain, Vice President, Finance Sanden Vikas India Pvt Ltd
37. Durgesh Kabra, Council Member ICAI, Mumbai
38. GV Krishna, Independent Director, Hindustan Petroleum Corporation Ltd.
39. Girish Ahuja, Author – Direct Tax
40. Gurmeet Grewal, Author – Accounts
41. Hans Raj Chugh, Council Member ICAI, Delhi
42. Harish Choudhary Jain, Chairman NIRC, ICAI
43. Jashan Arora, Director, Master Capital
44. Jay Chhaira, Council Member ICAI, Surat
45. Jayant Gokhale, Former Council Member, ICAI
46. KG Somani, Former President, ICAI
47. KM Agarwal, Former President, ICAI
48. Kapil Gupta, Former Chairman NIRC, ICAI
49. Kemisha Soni, Council Member ICAI, Indore
50. M Devaraja Reddy, Former President, ICAI
51. MK Aggarwal, General Secretary, Shri Agrasen International Hospital
52. MM Chitale, Founder, Mukund M Chitale & Co
53. MP Vijay Kumar, Council Member ICAI, Chennai
54. MR Venkatesh, Author & Commentator
55. Mahesh Baboo Gupta, Independent Director, Punjab National Bank
56. Mangesh Kinare, Former Council Member, ICAI
57. Manmohan Khemka, Partner, SAMYNK & Co.
58. Manoj Fadnis, Former President, ICAI & CAPA
59. Manoj Kumar Anand, Partner, M K Anand & Associates
60. Mitil Chokshi, Partner, Chokshi & Chokshi
61. Mukesh Patel, Former Member, Task Force on Direct Tax Code
62. Mukesh Singh Kushwah, Former Council Member, ICAI
63. N Nityananda, Economic Analyst, Federation of Karnataka CCI
64. Naresh C Maheshwari, Former President, ANMI
65. Nihar Jambusaria, Council Member ICAI, Mumbai
66. Nilesh Shah, MD, Kotak AMC
67. Nilesh Vikamsey, Former President, ICAI
68. Nirmal Jain, Founder & CMD, India Infoline Group
69. PP Parekh, Former Independent Director, Bank Of Baroda
70. PS Prabhakar, Managing Partner, Rajagopal & Badrinarayan
71. Pankaj Goel, CMD, Express Builder
72. Pankaj Periwal, Former Chairman NIRC, ICAI
73. Parmod Bindal, Independent Director, Steel Authority of India Ltd.
74. Pawan Kumar Sharma, Former Council Member, ICAI
75. Prafulla P Chhajed, Partner, Mayur and Chhajed
76. Prakash Agiwal, Partner, Agiwal & Associates
77. Prakash Sharma, Council Member ICAI, Jaipur
78. Pramod Boob, Council Member ICAI, Jaipur
79. Pramod Jain, Council Member ICAI, Delhi
80. Pramod Kapur, President, All India CA Society
81. Prasanna Kumar, Council Member ICAI, Visakhapatnam
82. Praveen Sharma, Director, Kingdom of Dreams
83. R Bupathy, Former President, ICAI
84. Raj K Agarwal, General Secretary- Executive Committee, BVSS
85. Rajender Arora, NICASA Chairman, NIRC
86. Rajendra Kumar, Council Member ICAI, Chennai
87. Rajesh Sharma, Council Member ICAI, Delhi
88. Rajib Sekhar Sahoo, Partner, SRB & Associates
89. Rakesh Makkar, Former Chairman NIRC, ICAI
90. Raman Mangla, Former Chairman NIRC, ICAI
91. Ranjeet Agarwal, Council Member ICAI, Kolkata
92. Ravi Kaushal, Former Sr VP, Airtel
93. SB Zaware, Former Council Member, ICAI
94. S Ravi, Managing Partner, Ravi Rajan & Co.
95. Sanjay Agarwal, Former Council Member, ICAI
96. Sanjay Bansal, Practicing CA
97. Sanjay Kapoor, Former Independent Director, Indian Oil Corporation Ltd.
98. Sanjeev Maheshwari, Former Council Member, ICAI
99. Sanjeev K Chaudhary, Former Council Member, ICAI
100. Sanjeev Kumar Singhal, Council Member ICAI, Mumbai
101. Savmit Grover, Founder and Partner, Savmit Grover & Associates
102. Shailesh Haribhakti, Partner, Haribhakti & Co.
103. Shriniwas Joshi, Council Member ICAI, Mumbai
104. Shweta Jain, Managing Partner, Shweta Jain & Co.
105. Sripriya Kumar, Author & Former Council Member, ICAI
106. Subhash Aggarwal, CMD, SMC Group
107. Sudhir Malik, Expert Smart City
108. Sumantra Guha, Former Council Member, ICAI
109. Sumit Binani, Chairman EIRC, ICAI
110. Sunil Bhargava, Financial Consultant
111. Sunil Goyal, Former President, ICAI
112. Sunil Gupta, Co-Chair, Indo European Business Forum
113. Sunil Talati, Former President, ICAI
114. Suresh Jain, Group CFO, English Indian Clays Ltd.
115. Suryanarayana Simhadri, Independent Director, Rashtriya Chemicals &
116. Sushil Goyal, Council Member ICAI, Kolkata
117. Sushil Kaushik, CEO, Nunhems India Pvt Ltd (BASF)
118. TV Mohandas Pai, Chairman, Manipal Global
119. VC Darak, Former Council Member, ICAI
120. V Murali, Former Council Member, ICAI
121. Vaibhav Jain, Partner, Mehra Goel & Co.
122. Vallabh Bhansali, Founder, Enam
123. Vijay Goel, Independent Director, Indian Bank
124. Vijay Mantri, Co-Promoter and Chief Mentor, Buckfast Financial Advisory
Services Private Limited
125. Vikas Khemani, Former CEO, Edelweiss
126. Vinay Gupta, Partner PVRN & Co.
127. Vinod Jain, Convenor, National Economic Forum
128. Vinod Rastogi, CA, Tanzania
129. Vinod Somani, Partner, KG Somani & Co.
130. Vivek Kumar, ex ED, HUDCO
131. Yamal A Vyas, Independent Director, Gujarat State Seeds Corporation Ltd.