How official data mislead Indian policymakers

The unexpectedly large 5.1 per cent year-on-year drop in October’s industrial output that triggered a 1.7 per cent drop in the benchmark SENSEX and took the rupee to record lows is in my view the latest example of the unreliability of Indian government statistics. It follows a major revision in India’s export data, and although the general direction of the data is credible, our broader concern lies in the fact that such numbers mislead policymakers in their attempts to manage growth and...