Has the industrial economy slowed down to a crawl? Or is it just some statistical miscalculation (caused by the Modi government’s habit of constantly changing the methods of measuring growth)?
Nobody knows. But everyone is puzzled – and worried. On an otherwise peaceful Friday evening the Central Statistics Office announced the latest industrial output figures. India’s factory production, the CSO said, grew by only 0.5 per cent in November 2018.
The immediate reaction was one of disbelief. Less than one per cent? Is that even possible? Was it not 8.2 per cent just the previous month, in October? How can it be just 0.5 per cent - surely a decimal point may have been typed out in the wrong place, it may have been 5.0 percent perhaps?
The CSO stuck to its guns. There is no typographical error. India's industrial production growth has indeed slowed sharply to 0.5 per cent year-on-year in November 2018. Confirmed. No arguments, please. Yes, things are at a virtual standstill in the manufacturing sector, whatever the Modi ministers may want to claim in their election speeches and TV sound-bites.
Fabricated metal products output fell the most (minus 13.4 percent), followed by electrical equipment (minus 9.6 per cent) and other manufacturing (minus 7.3 percent). In addition, mining output expanded at a softer 2.7 per cent (as against 7.2 percent in October) and electricity production increased 5.1 per cent (versus 10.8 percent in October).
These numbers tell the story. Yes, there was an upward swing in production in October, which was revised further upwards to 8.4 per cent. That was the highest in one year. And yes, all the experts had predicted only a slightly lower output in November – may be 6.5 per cent or even 3.6 per cent at the worst.
Even foreign agencies had made similar forecasts. A Bloomberg poll of 22 economists, for instance, had reckoned that the IIP numbers would show a growth rate of 3.6%. A Reuters poll of economists was a bit more hopeful, forecasting growth of around 4.1%.
But sorry, they were off the mark by quite a margin. November factory output was 0.5 percent only. In other words, the hard fact is that the Industrial Production data is much, much lower than what projections had estimated.
As usual, in order to avoid looking at what has gone wrong with the manufacturing sector, the instant reaction of some pundits has been to find fault with the forecasters. How could they have got it so wrong? Are they just like all the opinion survey faux agencies who make bold predictions about election results and end up hopelessly way off target?
The answer in regard to the poll agencies is – don’t shoot the messenger, even if he is just another conman crunching fake numbers in a hotel room instead of actually interviewing real voters.
As far as the real economy is concerned, the problem does not lie with domestic and private analysts armed with impressive degrees and even more awesome data-crunching machines.
It is the atmosphere that has been created that all is well with the Indian economy. Everything is doing fine. Do you not know that India is the fastest growing economy in the world? Are you not aware that this is the most popular Prime Minister we have had in the last 100 years? Have you no faith in the dictum: Leader is Right, Future is Bright?
Are you a victim of the Opposition propaganda that demonetisation has ruined the economy? That Make in India is a flop? That consumer demand has plummeted and because of that manufacturing companies have scaled down production and plants are working far below capacity?
Do not listen to the naysayers. This is just a temporary blip. By the Year of Our Lord 2030 things will be back to normal, the economy will be roaring, every Indian citizen will have a Universal Basic Income (never mind where the money will come from, the great leader will take care of that, just vote for him and rest in peace).
What does it matter if IP data misses market expectations in a given month? The CSO bosses can be sent on long leave for giving out such depressing statistics or maybe they can be transferred to the Fire Service.
Let the farmers agitate and go on long marches - they can be tear-gassed and shot if they try to disrupt traffic on city streets instead of toiling on the fields. The same applies to these pesky industrial workers. All they want is higher wages all the time. All they do is call one-day strikes and two-day Bharat bandhs.
They should all be packed off to Pakistan along with the foreign-funded NGOs, intellectuals and urban Naxals. All of them are unpatriotic anti-nationals and part of an international conspiracy to tarnish the good image of a good man who has a vision of Vikas, Vikas, Vikas…