Industrial output data flawed: Subbarao
06 Jul 2011
Reserve Bank of India (RBI) governor Duvvuri Subbarao yesterday said that the data on industrial output was flawed as it did not reflect the correct picture and could "potentially mislead policy calculations".
He added the Index of Industrial Production (IIP) had shown counter intuitive trends. He was referring to recent unusual fluctuation in industrial output data.
He added that this was contrary to the government's assessment of the underlying trend of some deceleration due to the crisis.
He added that the new IIP series revised with 2004-05 as the base, now showed that IIP growth was, in fact, negative during that period vindicating the government's intutition.
He said that the old IIP series indicated that industrial activity slowed in the second half of 2010-11 relative to the first half but the revised IIP series showed that industrial growth maintained roughly the same pace between the two halves of the fiscal year.
He added that the poor quality of data "could potentially mislead policy calculations".
