Data, data everywhere, but not a thought to think

A small industry has emerged on social media whose main job is to take a single data point every few days and hammer it over and over again, to tell us that India is doing well. It includes financial and other influencers, investors, fund managers, economists, bureaucrats, and so on.

These experts tell the world at large that all is well with the Indian economy. One data point that they regularly use is GST collections. Every month, the increased GST collections are offered as evidence of the economy doing well.

There are multiple problems in it. First, GST collections are always a certain percentage of price. If prices go up, GST collections go up. This is a no-brainer. Wholesale inflation was 13 per cent in 2021-22 and 9.4 per cent in 2022-23. So, once prices have gone up, GST collections continue to remain high in nominal terms.

Second, every year the population also grows 1-1.5 per cent and that adds to the GST collections. Third, in the last few years, there has been a crackdown over GST evasion, leading to higher GST collections. Kudos to the government for this. But this doesn’t mean higher economic activity. It just means that economic activity that wasn’t being taxed earlier is now being taxed. And this reality will gradually start showing up in GST data. Fourth, there has been an increase in the consumption of higher-priced goods and services post the pandemic, leading to higher collections.

Another favourite data point of these “all-is-well”wallahs is air travel. Recently, the Ministry of Civil Aviation tweeted that on April 30, an all-time high of 4,56,082 passengers travelled domestically. Again, this data point was used to try and drive home the point that the Indian economy is doing well. Firstly, it’s just 4.56 lakh individuals in a population of more than 140 crore. Secondly, as the recent Indus Valley Report pointed out, 1 per cent of Indians account for 45 per cent of flights. All the April 30 data point tells us is that the well-to-do Indians are doing even better.

Then there are the monthly UPI transactions data. As far as the convenience of payment goes, that has gone up leaps and bounds. Nonetheless, as the National Payments Corporation of India itself pointed out in March 2022: “Various studies on payment systems have observed that about 75 per cent of the total volume of retail transactions (including cash) in India are below Rs 100 transaction value.” Before UPI, most such transactions were in cash. Now they are digital. This in no way implies that the overall number of economic transactions has gone up, and hence, economic activity has gone up. Also, as the Indus Valley Report points out, 6.5 per cent of users are responsible for 44 per cent of UPI transactions.

Finally, domestic passenger vehicle sales (cars) is another data point that is offered to suggest that all is well. In 2022-23, a total of 3.89 million units were sold. This was 15 per cent higher than the previous high of 3.38 million in 2018-19. If one were to nitpick, this is a growth of 3.6 per cent per year, which is pretty mediocre.

But even without this, a bulk of these sales have happened in what the industry categorises as the more-expensive ‘multi-utility vehicles’. The sales of what the industry categorises as passenger cars have fallen. Also, most importantly, if we look at the long-term trend, as the Road Transportation Year Book of 2018-19 points out, cars, jeeps and taxis formed around 13 per cent of the total vehicle population. This figure has largely remained stagnant over 20 years. So, while more people have cars, many more people don’t have them in comparison to 20 years back. Further, as the Indus Valley Report points out, only 7.5 per cent of Indian households have cars.

Compare this to domestic two-wheeler sales, which in 2022-23 stood at 15.86 million units, very similar to the 15.97 million units in 2014-15. Somehow, the “all-is-well”wallahs never seem to get around to sharing this data point.

In fact, what these data points tell us is that a small section, or the well-to-do part of the society, is doing even better than it was in the past. On the flip side, data collection that would have given us the right economic picture for a large part of the society seems to have taken a backseat. The last Consumption Expenditure Survey (CES), using which poverty estimates are calculated, dates to 2011. The 2017-18 CES, which would have given us more recent data, was junked. The decadal population census, which should have happened in 2021, has been put off indefinitely.

So, there is data, data everywhere, but not a thought to think. And finally, propaganda and nuance never really go together, with propaganda having to cater to the lowest common denominator, which is precisely what is happening here.