There is no positive news on the front page of Business Standard today. There is immense confusion right now about whether the economy is really recovering. Just like there was confusion for long in early 2008 about whether there was really a recession or the economy was just acting weird.
As all hopes are pinned on China to drive the recovery, India continues to feel great about its positive GDP growth figure, which, by the way, is a highly arbit figure, given the way it is calculated in India, and everywhere for that matter. The actual figure could be much higher. Similar is the case in India with WPI, the indicator for Inflation. The basket of goods it comprises includes stuff which nobody uses nowadays and excludes stuff that grab the major spending today. And we end up having a negative Inflation value. That's pretty silly. On top of that, the new WPI under consideration chooses to exclude mobile phones, coz it is based on some upgraded basket of goods at some point a few years back when mobile boom had not picked up. When everyone knows it's bogus, why not fix it? It would have been great if we had more accurate measures to judge the economy. That would have helped us take better policy decisions. Economies are not supposed to be run by trial and error. It's no better if the tools you use are visibly erroneous.
No comments:
Post a Comment