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Mere Numbers Say Very Little

Mere Numbers Say Very Little

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  3 Feb 2019 6:03 AM GMT


D. N. Bezboruah

Statistics as a subject has been with us for as long as we care to remember. But right up to about 40 years ago, it was a subject that laymen did not have much to do with. We were happy if the seasons were good if the crops were good and people’s intentions were good. We learnt to keep our lives simple and our ambitions limited to what was reasonable to aspire for within our limited resources. Things like the gross domestic product (GDP) did not concern the common man at all; so we left such things to our economists. Our economists too were careful about not dabbling too much or too frequently with statistical data that most people did not care much about. In those days when we did not have television, the morning newspaper was good enough for everybody to find out what benefits were there for everyone in the latest Budget. The itch for having every wish fulfilled instantly did not figure in our scheme of things because we were aware of the serious limitations that technology—or rather the lack of it—had imposed on our lives. But now that technology has made far speedier access to all kinds of information, we insist on instant wish-fulfilment though we often do not know what to do with our fulfilled wishes. This reminds me of what once happened to Albert Einstein. A young admirer was taking him around New York City and showing him its major attractions. Einstein and his companion moved across the city by bus and subway trains. After reaching an important attraction of the city, Einstein’s companion looked at his watch and said, “Do you know, Sir, we have saved exactly two minutes by taking this route?” Einstein’s laconic reply to this observation was, “Young man, perhaps you will now also tell me what to do with these two minutes.” Much of our obsessions with the statistical data that are supposed to affect our lives can be as meaningless (in the overall scheme of things) as the two minutes that Einstein’s companion had saved for him.

Things have undergone a sea change in recent times. Today, the Union budget is something that no educated person would think of missing. And as we listen to the budget speech made by the Finance Minister, the television keeps flashing the highlights of the Budget repeatedly so that no one need miss any detail at all. Similar things have begun to happen to our general elections. We have intelligent predictions about who is likely to win which seat and what the margin of victory is likely to be. This is followed by what is called ‘exit poll indications’ made just after polling has been completed for the day. And a lot of people lap it all up since no one wishes to appear uninformed about what is happening and what the poll experts are saying. We had none of this when I first started voting and even later on when I was a presiding officer at one or two general elections.

Television and our obsession with the statistical information available about election results have changed the way we approach elections. They have also changed other facets of our interest in elections and matters like demographic change. We are now being furnished with statistical details on our GDP growth rate from year to year. Part of the information that is doing the rounds is related to efforts directed at proving that the official figures on the GDP growth rate and the extent of unemployment are incorrect and therefore quite unreliable. This trend acquires some significance for two reasons. One is that economists are beginning to make such a fuss about half-a-percent of difference in the GDP of a particular year calculated over a month ago and a few days back that one would think this difference could spell the difference between poverty and well-being. Nothing of the sort is likely to happen if the growth rate of the GDP is down by less than one per cent. This is like an attempt to discover ghosts where there are none. The other is that no one is absolutely sure that all the data and calculations about the GDP of a particular year are absolutely correct and unquestionable. There can be serious questions about procedures of data collection, their proper use and correct interpretation. After all, such data are not culled from well-controlled laboratory experiments but rather from what human beings tell us about their own incomes and expenses and about the fiscal performance of organizations that they serve. There is always room for doubt about the correctness and reliability of the data provided especially in an election year. There are already allegations that some of the data related to GDP growth earlier were not correct, and that this called for the release of corrected data later on. A few examples should suffice.

The GDP growth rate for 2017-18 was earlier estimated at 6.7 per cent. Not satisfied with this low growth of the GDP, the Narendra Modi government recently hiked up the GDP growth rate to 7.2 per cent to make things look quite a bit better than they really were. The earlier estimate of 6.7 per cent GDP growth for 2017-18 had been released just a month ago. If such frequent changes are made to statistical data, why should people be expected to accept only the revised data as correct and not the data provided earlier? But there is an even bigger surprise in the revised estimates of the Central Statistics Office (CSO). The GDP growth rate for 2016-17—the year in which demonetization occurred—was earlier estimated to be 7.1 per cent. The revised figure is now 8.2 per cent. Considering that this is regarded as a rather high rate of GDP growth, people cannot be blamed for concluding that the growth rate had been revised to make the picture look brighter than it really is in an election year. And the unemployment rate in the country, which, at 6.1 per cent, has been the highest in 45 years, is also an important reason why the GDP growth figures have had to be doctored to make the overall economic scenario look brighter than it really is.

And what does the interim Budget for 2019-2020 do? For starters, it raises the direct income tax exemption limit so that people with a gross income of Rs 6.5 lakh per year may not be required to pay income tax if they invest in provident funds, specified savings, insurance schemes, etc. While such measures to reduce the number of income tax assesses are hailed by everyone in the country, what people tend to overlook is that such measures also exclude a large number of people from the participation of democratic rule and from identifying themselves as tax-paying Indians. In a sense, therefore, it prevents a substantial number of people from being stakeholders in the democracy that they belong to. It might have been better to have a much larger number of Indians paying very small amounts of income-tax so that they have a sense of belonging to the republic. At the same time it is imperative that the government find reliable ways of ensuring that no one who is in the bracket of direct tax assesses is able to escape paying taxes. It is true that the number of tax-payers has steadily increased over the years. But so has the population. The government must find a way of getting a reliable estimate of the actual number of direct tax assesses and ensure that they pay their due taxes. At present, though the number of direct-tax payers has increased, a large number of those who fall within the tax bracket have managed to get along without paying any direct taxes. This is a situation that must be brought to an end without delay if the country is to depend on being financially supported by every single tax-payer who is required to pay direct taxes.

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