Pakistan cooking the economic books?
Whither poverty reduction?
That the economy has stepped out of the low 3-4 per cent growth path needs to be acknowledged. That the manufacturing sector – automobiles, cement, etc., — too is beginning to show some buoyancy also needs to be recognized. Yet the scale of this recovery remains uncertain. Questions arise on account of the tendency over the last five years to manipulate data and misrepresent facts. Suspicions are heightened on account of the failure to appoint a Director General of the Federal Bureau of Statistics since June 2003. Not surprisingly, fears exist about the statistical claims collapsing a la the stock market.
The underlying concerns about the data, and the claims based thereon, are heightened by inconsistencies. For example, manufacturing value added in 2003-04 is shown to have increased by 13.4 percent despite a decrease in industrial consumption of electricity, gas and oil by 19.2, 13.8 and 20.7 percent, respectively. This implies an increase of energy use efficiency of between 24 to 29 per cent between 2002-03 and 2003-04. The sharp enhancement in energy use efficiency in the manufacturing sector over the period of just one year raises questions of plausibility. An explanation is called for.
Suspicion that a part of the data is ‘manufactured’ to support claims of success is provided by a number of instances. One such glaring case is growth in tax receipts. The customs duty data for 10 out of 13 commodity groups reported in the Budget documents for the years 2002-03, 2003-04 and 2004-5 show the same growth rate. For example, the growth in customs duty receipts is a uniform 3.1 percent, 9.7 per cent, and 27.0 per cent for all 10 commodity groups for three years, respectively. That customs duty receipts have been shown to increase at the same rate for different commodity groups demands an explanation. Clearly, the data appears to have been ‘created’ by applying a uniform growth rate for the 10 commodity groups.
Yet again, tax revenue targets for 2002-03 and 2003-04 were set at Rs460.6 billion and 510.0 billion respectively. Interestingly, actual receipts were also shown to be Rs460.6 billion and Rs510.0 billion for the two years. In 2003-04, targeted and actual receipts of direct and indirect taxes were also shown to be almost exactly the same at Rs161 and Rs348 billion, respectively. Such absoluteness exactness in achieving revenue targets – and that too two years in a row – is not feasible. Clearly, the data cannot be relied upon.
It may not be appropriate at the present moment of euphoria in official circles to sound anything but positive about the economy. General Musharraf’s economic managers may be supremely optimistic; however, the collapse of the stock market is a warning against building hopes based on contrived statistics.
That the economy has stepped out of the low 3-4 per cent growth path needs to be acknowledged. That the manufacturing sector – automobiles, cement, etc., — too is beginning to show some buoyancy also needs to be recognized. Yet the scale of this recovery remains uncertain. Questions arise on account of the tendency over the last five years to manipulate data and misrepresent facts. Suspicions are heightened on account of the failure to appoint a Director General of the Federal Bureau of Statistics since June 2003. Not surprisingly, fears exist about the statistical claims collapsing a la the stock market.
The underlying concerns about the data, and the claims based thereon, are heightened by inconsistencies. For example, manufacturing value added in 2003-04 is shown to have increased by 13.4 percent despite a decrease in industrial consumption of electricity, gas and oil by 19.2, 13.8 and 20.7 percent, respectively. This implies an increase of energy use efficiency of between 24 to 29 per cent between 2002-03 and 2003-04. The sharp enhancement in energy use efficiency in the manufacturing sector over the period of just one year raises questions of plausibility. An explanation is called for.
Suspicion that a part of the data is ‘manufactured’ to support claims of success is provided by a number of instances. One such glaring case is growth in tax receipts. The customs duty data for 10 out of 13 commodity groups reported in the Budget documents for the years 2002-03, 2003-04 and 2004-5 show the same growth rate. For example, the growth in customs duty receipts is a uniform 3.1 percent, 9.7 per cent, and 27.0 per cent for all 10 commodity groups for three years, respectively. That customs duty receipts have been shown to increase at the same rate for different commodity groups demands an explanation. Clearly, the data appears to have been ‘created’ by applying a uniform growth rate for the 10 commodity groups.
Yet again, tax revenue targets for 2002-03 and 2003-04 were set at Rs460.6 billion and 510.0 billion respectively. Interestingly, actual receipts were also shown to be Rs460.6 billion and Rs510.0 billion for the two years. In 2003-04, targeted and actual receipts of direct and indirect taxes were also shown to be almost exactly the same at Rs161 and Rs348 billion, respectively. Such absoluteness exactness in achieving revenue targets – and that too two years in a row – is not feasible. Clearly, the data cannot be relied upon.
It may not be appropriate at the present moment of euphoria in official circles to sound anything but positive about the economy. General Musharraf’s economic managers may be supremely optimistic; however, the collapse of the stock market is a warning against building hopes based on contrived statistics.
posted by India News Watch at 6:31 AM
<< Home