India’s Top Statistician: DeMo Impact On Economy Is Made Out To Be Bigger Than It Actually Was

India’s top statistician, T C A Anant, in an interview with Indivjal Dhasmana of the Business Standard, has said that remarks made by some commentators on the effect of demonetisation (DeMo) on economy are too simplistic, adding that he does not find merit in these observations as they do not adhere to statistical standards.

Explaining his comment, Anant said one needs counter-factual figures to gauge the impact of DeMo on the economy. Instead of using counter-factual figures, some commentators, he said, have compared growth with last year’s numbers.

“If you take the first advance estimates as counter-factual, since these used data till October, you will find GDP growth in 2016-17 is identical to the one given by the provisional figures. I am not comfortable using first advance estimates as counter-factual figures, but what I am saying is that simplistic analyses will lead you to all sorts of statements that are not statistically robust,” he was quoted as saying.

When asked if the economic slowdown was because of a big increase in price deflators, he said that there is a tendency to overstate the impact of DeMo.

“My sense is there is a certain wishfulness in stating DeMo was a much bigger problem than it actually was. I am not saying there is no impact of DeMo - it had some negative impact, it had some positive impact. It is difficult as a statistical exercise to say what those elements were,” he said.

On being asked if the economy needs a policy boost in the form of lower interest rates for better growth, he refused to comment of repo rate, but said that macroeconomic interventions to achieve transformation of the economy are certainly called for.