The clichéd phase coined by Benjamin Disraeli on statistics has been reinforced year after year through the economic survey. While the standards of reporting have been formalised in the corporate sector over the years, the statistics on the health & wealth of the nation is yet to find a reliable footing.
The QLI (Quality of Life) parameter has got lost in the maze of national statistics. Environmental concerns are yet not captured through statistics. The frequent change in the standards of reporting in economic survey by the policy makers has made the release of the economic survey a mere ritual and left the common man baffled with jargons.
The survey has projected a GDP growth of 8.7 % compared to 9.6 % during the last fiscal. However, the agricultural and allied sector's growth rate was projected at 2.6 % compared to 3.8 % during the last year. Concerns of productivity and yield shall continue to haunt. The allocation for the NFSM (National Food Security Mission) for the year 2007-08 is Rs 402 crore. Needless to mention, even after 50 years after Independence, 52% of the population still depends on agriculture, although its share in the GDP has gone down to around 18 %. In the midst of the chest thumping production of food grains figures we shall remain dependent on imported wheat and pulses. Concerns of Energy Security has not been highlighted at all.
Commodities futures business grew by mere 7.8 % in 2007 (in terms of the lots traded) against a growth of 76.3 % growth in 2006. The statistics have proven that the hype created about the growth in the commodities futures is a mirage. The growth is mainly contributed by the precious metals, Crude and base metals prices shooting up. The survey failed to point out that while price discovery was relevant for the domestic commodities, the current state of affairs pushed the market to be an instrument for speculation.
International referenceable commodities contribute almost 70% of the turnover whose prices are not discovered on the domestic exchanges. While almost a quarter of page is devoted to comparison of MCX Commodity futures exchange with other Indexes, the contribution of the exchanges for price discovery is ignored.
If "Optimism, but with caution as the watchword" for the FM then perhaps we should "Watchout" for his words on containment of Inflation. Even after banning Tur and Wheat futures last year with the assumption that the futures market has pushed the spot prices, the prices in the current year have not been reined. The ruling spot prices are up by 70% & 40% for Tur & Wheat respectively since the ban of futures.
Published in The Financial Express On The Economic Survey 2007-08
