108 Economist Vs 131 CA- Tracking The Trial

On 14th March 2019, The 108 economists and social scientists issued an open letter alleging that Indian statistics were “under a cloud for being influenced and indeed even controlled by political considerations.” In clear words they mention “[Any] statistics that cast an iota of doubt on the achievement of the government seem to get revised or suppressed on the basis of some questionable ideology,” A 108 group included the economist and scientists like Abhijit Sen, Himanshu, Jayati Ghosh and C.P. Chandrasekhar of Jawaharlal Nehru University, R. Nagaraj of the Indira Gandhi Institute of Development and Research, Jean Dreze of Allahabad University and Abhijit Banerjee of the Massachusetts Institute of Technology. They bluntly criticised the government’s recent decision to withhold the release of the NSSO’s employment survey for the year 2017-18, despite the nod of the National Statistical Commission (NSC) as well as its new GDP back series data. The resignation of NSC chairman P.C. Mohanan along with another member under protest earlier this year brought the issue to the fore. Hence, economists from across India and overseas issued a statement urging the government to protect the integrity of public statistics by providing autonomy to NSC and NSSO

On 18th March 2019, 131 Chartered Accountants debunk Allegations Of India’s ‘Shambolic Economic Statistics’ Made By Certain Economists, Social Scientists. Objections to the 108 member caution letter came from an unexpected quarter. This attack came from a totally unexpected direction as Chartered accountants never logged their heads with any of the past economic or otherwise any national controversy ever. The letter achieved a better sense as it was signed by 10 Past Presidents, 21 sitting Council Members, 30 ex-Council/regional members and more than 20 nominated by Government in the last four years to the various PSU and companies Board. Many of the signatories are those who represented their big 4 firms in a patch-up MCA- COC report absolving their conduct as audit firms. The 131 groups, though largely represented by those who were nominated by the government in the last 4 years defended the government and questioned the economist political motivations and appealed to all professionals to come together to portray the progress made by India in recent years, and counter the “baseless allegations” and outrightly rejected their concerns. They also question the 108 groups about the timing of the said letter, their true intentions which as per them deliberate with intent to affect the upcoming parliamentary elections.

The economist at large would have never imagined even remotely that Chartered Accountants with all their professed humble background of being cool professionals would be used as banter not by their colleagues or critics but by the rich experienced Chartered Accountants leaders. This is exactly what happened after the four days that Chartered Accountants slammed economists saying as a political tendency, which is being developed to disown institutions especially at the time of elections which are now round the corner. 

THE BACKGROUND OF CONTROVERSY

It started in August 2018 when the NDA government slashes era GDP growth rate. The August numbers had been calculated by the Sudipto Mundle committee set up by the National Statistical Commission (NSC), which had bumped up growth during the UPA years based on the production-shift method. As per the data released, the economy in 2010-11 grew by 8.5% and not 10.3% as estimated earlier. Earlier, the government issued revised GDP data for the 2005-12 fiscal years that lowered growth under the previous Congress-led UPA, in contrast with recalculated numbers that had been released in August and sparking a controversy ahead of general elections in a few months. The back series adjusts GDP numbers for the period using new methodology with the base year as FY12. The August revision had shown four years of 9%-plus growth during FY06-FY08 while the latest numbers don’t cross 9%. The average growth for the UPA years after the back-series revision for FY06 to FY12 declines to 6.82% from 7.75% earlier, well below 7.35% during the four years of the present government.

Former finance minister P Chidambaram said through the series of tweets, that the Niti Aayog, which was involved in the exercise, should be scrapped. “Niti revised GDP numbers are a joke. They are a bad joke. they are worse than a bad joke. The numbers are the result of a hatchet job. Now that Niti Aayog has done the hatchet job, it is time to wind up the utterly worthless body,” Responding to Chidambaram’s comments, Niti Aayog Rajiv Kumar tweeted: it would be far more in keeping with your acumen to give us details of why the new back-series data is wrong than merely to assert that they are wrong. I challenge you to prove them to be technically deficient.”

THE OVERALL SAME TRAJECTORY

Many Independent experts came forward to rescue the Government claiming that the new numbers didn’t alter the overall trajectory. Some economist took it as a matter of routine that “Directionally, the new series is similar to the old series, which suggests that the latter was not misleading the policymakers on whether the pace of growth was accelerating or slowing down,” Further, India Ratings, said the data showed minor change. “Even this data shows in investment rate from 39.8% in FY 11 to 30.6% in FY18 and decline in the savings rate to 29.6% in FY17 from 36.2% in FY11. These are major economic challenges which Indian economy is currently facing,” The Advisory Committee on National Accounts Statistics recommended the methodology used for calculating the GDP back series. While the methodology for preparing the back-series estimate for 2004-05 to 2010-11 is largely the same as methodology followed in the new base (2011-12), in certain cases owing to limitations of the availability of data, either splicing method or ratios observed in the estimates in the year 2011-12 have been applied.

THE 108 ECONOMIST GROUP ATTACK

A group of 108 economists and social scientists have raised the issue of altering data for own convince of Modi-led government. They slammed the government about their intentional move to revise or withhold the release of unfavourable or “uncomfortable” economic data. Further took up the cause that Indian statistics and the institutions associated with it have “come under a cloud for being influenced and indeed even controlled by political considerations. They emphasised the fact that economic statistics are a public good and it is a vital necessity for policy-making and informed public discourse in democracies where citizens seek accountability from its government. Therefore, “it makes it imperative that the agencies associated with collection and dissemination of statistics like Central Statistical Office (CSO) and National Sample Survey Organisation (NSSO) are not subject to political interference and their work, enjoys total credibility.”

The group forwarded two glaring examples of data-tweaking. First is a failure to meet promises to create enough jobs for the million Indians entering the labour market each month and withholding the release of the National Sample Survey Organisation’s (NSSO) employment survey for the year 2017-18, despite the nod of the National Statistical Commission (NSC). They alleged that in December 2018, the schedule for the release of results from the Periodic Labour Force Survey (PLFS) of the National Sample Survey Organisation (NSSO) was not met. This was the first economy-wide employment survey conducted by NSSO after 2011-12 and was therefore deemed important and made an allegation that the PLFS of 2017-18 will be scrapped altogether by the Government. Further, the government has also been criticised for its new back series GDP data that drastically lowered growth rates during the regime of the previous UPA government. In January this year, for instance, the Central Statistical Offices’ revised estimates of GDP growth rate for 2016-17 (the year of demonetisation), shot up by 1.1 percentage points to 8.2%, the highest in a decade! “This seems to be at variance with the evidence marshalled by many economists” According to the 108 Group open letter, in 2018, two competing back series for varying lengths of time were prepared – separately by two official bodies, (a committee of) the NSC and later by the CSO. The two showed quite opposite growth rates since the last decade. The National Statistical Commission numbers were removed from the official web site, and the CSO numbers were later presented to the public by the Niti Aayog, an advisory body which had hitherto no expertise in statistical data collection. The numbers released by the NITI Aayog were in complete divergence from the numbers arrived at by a sub-committee of the NSC.

They 108 signatories to the open letter urged all professional economists, statisticians, independent researchers in policy – regardless of their political and ideological leanings – to come together to raise their voice against the tendency to suppress uncomfortable data and impress upon the current and future government authorities, to restore access and integrity to public statistics and re-establish institutional independence and integrity to the statistical organisations. The letter concluded stating, “the national and global reputation of India’s statistical bodies is at stake. More than that, statistical integrity is crucial for generating data that would feed into economic policy-making and that would make for honest and democratic public discourse.” 

THE 131 CA DEBUNK ALLEGATIONS IN COUNTER

In a logging head with a non-comparable class of economists, 131 chartered accountants leaders have responded with a stinging rebuke of ‘Shambolic Economic Statistics’ to the letter’s signatories, questioning their terming it a “politically motivated attempt to discredit the government.” The CAs group led by past presidents and of sitting council members rejected the issue as the “general bunch of allegations” made by the economists and that changing the base year for GDP data is a common practice. Their letter claims that the decision to change the base year from 2004-05 to 2011-12, a move that eventually to the revision of GDP growth during the UPA’s tenure, was actually approved by the UPA itself and implemented by the Modi government. And found the methodology as follows in the United Nations’ 2008 national accounting guidelines. The CAs showed their standing with the credibility of the Indian government’s data by explaining that international agencies like the IMF and World Bank routinely use the figures. The letter also said that “disputing government data is routine for experts around the world and Changing of GDP base year is a regular feature. Instead of taking issue with specific areas, a general bunch of allegations has been made by the 108 economists, which leaves one guessing about the motivation of the signatories. They further added that 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,”

TWEETER & SOCIAL MEDIA – WAR OF WORDS

 The Finance Minister took his own time to enter into such controversy. There was no reaction from the Government to the 108 economist groups. He took the allegations against him personally. Being experienced, Former Secretary, DCA, first he fielded the players well. The players were new to this game but renowned. After securing a shield from the unexpected quarter of CAs, he bounced back to 108 economists by terming them as an economist under compulsions of ‘Compulsive Contrarians’. The reactions from the people at large were to scold CAs being the issue out of their dominion. The reactions were sharp against Finance Minister and on the other hand, Chartered Accountants have been termed as poking their nose unnecessarily. The highlighted messages are enumerating here.

Arun Jaitley on Tweeter:

The recent statement by the 108 purported economists reveals compulsions of ‘Compulsive Contrarians’. Most of them have, over the last few years, repeatedly signed the memorandums of manufactured issues against path breaking reforms of the present government.

Responses:

Shekar Gupta: Is this what North Koreanisation of intellectual debate looks like… when Modi Govt fields an army of 131 CAs back to defend its economic data, and question motives of scholars who criticised it

Madhumita Majumdar: The use of the term ‘purported’ for a group of respected economists reeks of malice, arrogance and dishonesty. It only weakens your case, Mr Jaitley. Your govt is a deeply paranoid one. A more confident govt would have addressed their concerns with seriousness and respect.

Prabuddha Chaudhry: Very childish to call out these 108 economists who teach in some of the best universities of the world because they don’t subscribe to the voodoo brand of the economics of this govt, Mr Jaitley.

Ajay Kohli: And the CAs are god sent angels …. certificate for a price !!

Awake Citizen Shivam :Don’t know how do you see your face in the mirror ,such a shameless man ,with no dignity & honesty ,despite being kicked out by people of Amritsar, this man was made FM &caused HAVOC in India, destroyed millions of MSMEs & other industries, now have started fraud by fake GDP figures. 

Ayesha: Growing up in 80s/90s India I used to think you were one of more educated politicians and felt secure about the future. But you are no different than an average blinded bhakt of your party. If people like you can’t put country before party what can be expected from a layman

Chirag Shekar: With all due respect, Mr Jaitley, you should listen to criticism, especially when it comes from some of the world’s most respected thinkers. Counter their arguments factually if you must, but of course, that isn’t possible, is it? Despite the reforms, their arguments are valid.

Vikrant Vare: Your this tweet tells a lot that you are not fit for Finmin position, the man who doesn’t approve dissent should never be on decision making position..

Alert Indian from Chokidars: Fake propaganda to sabotage real news of distress economy. These so-called 131CA r nothing but stooges of BJP who know only art of converting black money to white for all BJPee notes. They have no idea of data on job loss, new jobs, economy &farmers. They helped many in GST scam.

Siddhartha Das Gupta: And the credibility of the 131 CA’s? how would common people like us know on what basis the team of CA’s was formed

Rajesh Sachdeva: How unbecoming but how unsurprising! You may win the election but you are losing credibility for you can’t withstand any criticism. You simply don’t want the truth. One expects some integrity from respected leaders. Collective consciousness is not yet dead

Jogani: Haha!  131 CAs and their chowkidar is one Lawyer who can squeeze their balls the way he wants if he has the ‘strength’ after his sickness

Rohit Shanker: @ShashiTharoor  please help us  understand the meaning for compulsions of ‘Compulsive Contrarians’ 

 Vinay Kaul: Funny how a lawyer, is relying on a report by chartered accountants to say that 108 economists from the world’s best universities are wrong about…. Economics.

Sarvesh Sharma: I clearly recall to this day that during NDA-1, when GDP growth was 5.5%, a very eminent economist, presenting his Mid-year Economic review at IIC, expressed concern about the economy being in recession. There are so many political activists in our country with a PhD in economics.

Chokidar Vinay: Sir 1.3 billion is standing with Modiji and his team these contrarians are no force when it comes to citizens if they want to know economy let them first step out of their comfort writing is easy understanding the ground level requires effort.

My2cents: 108 socialist economists as a group is the second avatar of award Ghar wapsi gang, just sprang in action before the election! Each one of them got a Nehruvian commie lite state funded degrees to milk GOI in name of schemes for poor Indians.

Devi Dual:India GDP are very fast for four to five year. This is good sign for our Economy.  Modi government focus on the manufacturing sector.

Anurag Agarwal:I don’t know why but somehow I get unusually irritated by reading through Arun jetli tweets…

Chokidar Ashok Kumar: They have forgotten to see straight as their head is too much bended towards left ! They are being used now a days by whom they are aware. Get a designation of scholar and few claps for their service

Dipak Subarwal:@arunjaitley Ji you R THE GOVT ….but still it seems you are bullied by “Compulsive Contrarians”, I support Modi Govt, must make response better, parties rabble-rousers don’t or can’t go beyond Cow

Chaiwala Nahi: Says who??? Someone with a law degree who has been running the finances of this country without any clue whatsoever…

Skum: Chartered accountants reply fully appears to be “motivated”. They have degraded the CAs profession at its core.

 R P Tiwari: They r from sleeper cell of fake economists, waking in time to confuse the general illiterate & semi-literate mass of people.

Jayanagar: I could have taken that 131-strong group more seriously if they had presented serious arguments against the 108-economists. They asked their invective to be taken seriously because ‘they were CAs and so ‘knew the situation on the ground’

Ankit Chakravarty: These 108 purported economists should learn from anchors and journalists of Indian tv media what are the real issues of this country…they shud participate in tv debates for enlightenment. I challange them, they will not say a word in debates.

Ashok: Chartered accountants – I am one, too – have a lot to answer for in their own professional domain. ILFS is the most recent instance of the statutory auditors having been asleep at the wheel. Restoration of the credibility of official data and statistics should be high up on the post-election agenda. It forms the basis for rational decision making.

Anil :It is very likely that Mr Pai has had a different syllabus on ethics, morality, good governance and economics than a regular CA student in India. I am always amused with his inability/unwillingness to see the reality as it exists. First thing that came to my mind was the credibility of accounting policies and practices and then when have CAs become expert on Economics. Disclosure – I am not a CA, but have enough in the family who will tell that Economics is not one of their strengths.

Shahin Badsha: It can be easily seen the bias of these economists when the world institutions have not doubted Government published data. And so also the foreign investors, who would invest in an economy that is not performing. Also, the amount of development we see around us such as growth in passenger traffic, auto sales, white goods sales, commercial real estate growth etc all point out to a healthy economy. Biased economists have to satisfy their western masters first before being honest to their nation. Shameful to know how low is their integrity. Thanks to The Print and the CAs who have reasoned out the error and bias of the 108 economists.

Mohammed Fayazuddin Shaikh: CA institute sirf government in power ko hu support karegi. Be it UPA or NDA. 

Nitro :CAs are only there to make money. By sucking up to this govt they will make money by any means necessary. They have zero credibility.

Menon: Who are these “scholars”? Leftist anti-nationals, Commies and other vermin who got their position by flaunting their anti-National badge. They have no practical experience but only theory. It IS a question of trying to undermine FDI by a group of traitors who feel that if they cannot loot India, India must be destroyed. It also includes the conversion mafia. India’s data is accepted by international fora with real experts not paid ranters with an agenda to break India. Challenging every institution that does not support the Break-India brigade is the style of today. It is rather silly of you not even to know that there is no NSS data. It is NSO. Maybe you are scared of NSS of Kerala also because it has taken a stand? LOL

Vinay: More relevant question is about the integrity of the economists who have earned their living under the shadow of their masters (The Gandhi-Nehru family) for so many years. They did not find anything wrong since the last 7 decades and now everything has gone bad in the last 4years. Hypocrites.

Ravindra Beleyur: Did the current President of ICAI also part of this exercise – one of the signatory to this? I hope his name has been put forward by somebody without his knowledge. I wish and hope I am NOT wrong. If he has really put his signature, it means he has been pressurised by this government to do this.

Sekhar Katiki: Not able to understand how CAs came into the picture when economics and statistics are concerned. This clearly shows they have not properly understood what is being discussed.

Krishna Mallya: 68 intellectuals, Bollywood actors etc submitted a memorandum to the US not to give Visa to Modi Ji. This is when he was CM Gujarat. Tried their best to put hurdles in his political career. Bad luck for these 68, Modi won 2014 and became PM. Now the same group adopted a new strategy. It is famously known as Award Wapsi. But it didn’t dent d image of Modiji. 2019 election is due, a new group of 108 waging a different war. Indications r there, they too fail

Sudesh: To some extent, it appears true. When Sri Chidambaram silently started shifting base year for inflation data in UPA I and successively in so many years and times, no such scholars objected and he got away, left great debris in outgoing UPA II.