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LATEST NEWS UPDATES | The Latest GDP Estimates: 'Shameful Use of a Govt Body for Propaganda' Prabhat Patnaik

The Latest GDP Estimates: 'Shameful Use of a Govt Body for Propaganda' Prabhat Patnaik

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published Published on Mar 6, 2017   modified Modified on Mar 6, 2017
-TheCitizen.in

NEW DELHI: Perhaps no other public policy debate in post-independence India has seen as much of an “inversion of reason” on the part of the government as the demonetization debate.

When critics were pointing, on the basis of government statistics themselves, to the palpable failure of the demonetization measure to achieve its purported objective, which was to cripple the black economy, the government kept harping, in its justification, on the extraordinary “boldness” of the move.

Its position in effect amounted to saying that any move, no matter how irrational, is justified if it involves “courage”, i.e. invokes “shock and awe”, which was a sheer “inversion of reason”.

This “inversion of reason” is carried much further now by the use the government is making of the latest GDP estimates. One just has to step out of one’s home to the grocery shop round the corner to acquaint oneself of the drop in business which the grocer has suffered owing to demonetization.

The shopkeeper from whom I buy my grocery had told me that he had experienced a 50-60 percent drop in his business in the immediate aftermath of demonetization; he says that even now he is still facing a 20 percent drop in business compared to its pre-demonetization level. What he says about the drop in his business is echoed by countless other shopkeepers all over the country; and numerous journalists, academics and observers who have talked to shopkeepers across the country have testified to this fact.

The recessionary effect of demonetization on the economy in short is an indisputable and established fact; if the GDP statistics of a government organization do not bear this out, then that should be an occasion not for asserting that there has been no recessionary effect, but for asking why they do not bear this out, i.e. what is wrong with the estimates.

And yet this is not what the government is doing. On the contrary it is asserting that there has been no shortfall in demand and mocking its critics on this score, with the Prime Minster even targeting a person of Professor Amartya Sen’s eminence through some fatuous and meaningless remarks about Harvard and “Hard Work”. This constitutes an “inversion of reason”. It is like the naked emperor strutting around in his nakedness and ridiculing all those who had called him naked with the words: “See how wrong and stupid you were. My courtiers have shown I am fully clothed!”

Arthur Bowley the renowned British statistician who had taught for years at the London School of Economics used to say: “The most significant facts of social life cannot be exactly quantified, but they can be directly observed”. In India today we are being asked to disbelieve what we directly observed in consequence of demonetization, on the basis of some totally spurious quantification. And that constitutes an “inversion of reason”.

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TheCitizen.in, 3 March, 2017, http://www.thecitizen.in/index.php/NewsDetail/index/1/10073/The-Latest-GDP-Estimates-Shameful-Use-of-a-Govt-Body-for-Propaganda


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