However, the committee, which met here on Friday, termed the methodology of calculating the growth figures ‘inconsistent’ and pointed to administrative weaknesses.
The five-member committee also decided to ask the Federal Bureau of Statistics (FBS) to look into the provisional 4.1 per cent growth number for 2009-10 keeping in view the discrepancies pointed out by the body. If the FBS decides to revise the figure, it may be for the first time that provisional growth figures would be changed after being printed in the Economic Survey of Pakistan.
The committee, headed by Deputy Chairman Planning Commission (PC) Dr Nadeem-ul-Haq, concluded that the government did not manipulate the 4.1 per cent Gross Domestic Product (GDP) growth and this was an accurate number. It said that there was no mala fide intention in revising downward last year’s growth figure.
“The financial year 2008-09 data showed that if some sectors’ growth numbers were revised downward other sectors saw an upward revision,” said Dr Ijaz Nabi, a member of the committee.
The government had constituted the committee to examine the methodology for arriving at the provisional growth estimate of 4.1 per cent and revising downward last year’s growth of two per cent to 1.2 per cent in order to get the advantage of a low base.
Independent economists had alleged that the government fudged growth numbers in different sectors such as construction, livestock, wholesale and trade.
An apparent drawback in the committee’s working was its limited mandate to examine growth data of last two years only. The government had also further revised downward the growth number of fiscal year 2007-08 to 3.68 per cent from a revised 4.1 per cent, which too gave the benefit of a low base.
The interesting aspect of the committee was that two of the members interacted with the Deputy Chairman Planning Commission on internet and before their maiden face-to-face meeting on Friday the report was on the table, prepared by the Planning Commission.
Committee member disagrees with decision
Former Adviser to the finance ministry and member of the committee, Dr Ashfaque Hasan Khan did not agree with the findings of the committee and in protest refused to attend the meeting.
“The report fails to answer the concerns raised by Economic Advisory Council members,” wrote Dr Khan in his dissenting note.
He wrote that the question raised by the members of the EAC was not about the methodology of national accounts but it was about the continuous downward adjustment of base year’s growth numbers to arrive at a relatively higher growth in the current year.
However, Dr Ijaz Nabi said that there was no bias in estimating the growth rate. He said during the last 19 years, the government revised downward the growth numbers 12 times.
Dr Nabi said that in the services sector, the committee investigated that in the trade component of the sector the exchange rate deflator was used, which was not consistent with the previous year’s deflator and had a variation of 20 per cent. “The yardstick should be constant,” he added.
He said the committee has requested the Federal Bureau of Statistics to look again at the deflator and if any discrepancy was found then change the GDP number. The one-fifth variation if proven would result in about 0.3 per cent increase in the revised GDP of last year.
It would then increase the revised GDP growth to 1.5 per cent and in return lower the growth of this year, said Dr Younis Jaffary, a member of the National Accounts Committee (NAC), which calculated the growth numbers.
Dr Ijaz said that the committee did find some inconsistencies in the data reported in the publications of the departments and the data given to the FBS for GDP calculation like growth in the banking and power sectors but their contribution to the overall growth was very little.
The perception that the GDP growth is not estimated on standard methodology and is deliberately enhanced to a high level of 4.1 per cent is not correct.
The committee has proposed to the government that in order to enhance the image of the statistics bureau as well as reliability of data it should make the FBS an independent body and ensure transparency in estimation of national accounts.
Published in The Express Tribune, June 26th, 2010.
COMMENTS (8)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ