Comment by Riaz Haq 4 hours ago

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

And that is reflected in the appropriate gauge: low-to-nonexistent growth of real wage rates (wages adjusted for inflation) in the last decade. At last, here we are at a point where there is consensus. Economist Jean Dreze and colleagues, frequent critics of the government, find that rural wages have grown at an annual rate of 0.1 per cent since 2015-16, and urban wages at 0.8 per cent. The government’s Economic Survey splits wage growth into many categories. It finds that regular, salaried workers have experienced a sharp fall in real wages since 2017-18; only casual workers experienced a rise after 2017-18, but their wages have stagnated since 2021-22, the period of high GDP growth rates. They too find that rural real wages have not grown.

Even these real wage growth estimates may be overstated since the inflation index does a poor job of accounting for the costs of renting a home. The statistical agency samples only a small number of homes, and making matters infinitely worse, many of those homes are government quarters, for which the house rent foregone plus a small licence fee is computed as rent. Of course, this increase is no reflection of market-supply demand forces, which have been pushing rents up rapidly. Also, the rise in rents (rental inflation) is evident only when a new contract is signed, so sampling households who are locked in contracts gives no sense of the inflationary pressures.



As is well-known, house rent is no less than Rs. 5,000-7,000 a month for a family of four, which eats up one-third or more of the about Rs. 15,000 earned by an urban construction worker, driver, security guard, gig worker, and others in the informal sector. Once house rental inflation is properly accounted for, urban poverty rates are much higher than official estimates suggest.

India has never attempted to house its vast informal labour force. As inequalities have increased—allowing some to pay sky-high prices and rents—informal sector workers, with only slow-rising nominal wages, must either squeeze all other expenses to live in proximity to work or spend unaffordable time and money on commuting. All other expenditure is squeezed. India’s housing crisis is an inequality crisis, and, no, you will not see it in the data.

So, we have a resolution. If you want the true Indian story, ignore GDP growth rates. Focus instead on the persistent inequality that has induced the rich to exit the Indian economy. Focus especially on the severe unemployment of the mass of Indians—which prevents real wages from rising. The Indian market for mass consumer goods is small, and while investors often talk big to impress authorities, they have no incentive to walk their talk.

The government is entrenching the status quo. Just as tariff breaks for the consumption of the rich and corporate tax cuts fatten the rich, changes to the former Mahatma Gandhi National Rural Employment Guarantee Act and the new Labour Codes will weaken workers’ bargaining power.

Data and democratic failure
As Indian inequality has ballooned over the past quarter century, the presentation of macroeconomic data has adapted to downplay the hardships and struggles of the poor and vulnerable. Instead, the data highlights and proclaims an emergent India, a story that the Indian elite, its global counterparts, and a compliant media are anxious to tell.

Comment by Riaz Haq 4 hours ago

Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

When statistics don’t reflect lived reality, they cannot discipline power. Governments can proclaim high growth, low inflation, and low unemployment even as jobs are scarce, wages stagnate, and rents soar. Citizens, stripped of reliable mirrors of their own experience, are left with anger but little clarity to demand change. The media must stand up: it must—in the words of journalist Margaret Sullivan—“give a voice to the voiceless and hold powerful people and institutions accountable.” If the media does not correct the narrative, who will?

The same process is visible in both India and the US, though at different stages. In India, the narrative fixates on dubious GDP growth, uses an irrelevant metric for assessing jobs deprivation, understates sky-high home rental costs, and fails to draw the line from mass stress to weak private investment. Politics is inevitably insulated from people’s true needs.

In the US, data remain abundant but are increasingly distrusted, weaponised, or drowned in noise. “Alternative facts” proliferate, fuelling polarisation rather than accountability. The American media is still stronger than India’s in critiquing policy, but the slide towards aligning with official narratives—or letting them persist—is unmistakable.

Data has broken free of its traditional moorings and now serves oligopolistic capitalism and nationalist pretensions. The space for informed democratic choice has shrunk. Symbols and spectacle have displaced reasoned debate. Power has hijacked policy. Restoring democracy requires data rooted in lived experience. Only then will citizens regain their voice and agency.

Sadly though, in both India and the US, a bad equilibrium has set in: a moral cul-de-sac. The elites are insulated and the media has chosen not to contest—and in fact to implicitly justify—the elitist policy drift. Who can break this equilibrium? With the media unlikely to play its role, only the elite have the power to influence change. But this equilibrium suits them all too well. Herein lies the peril.

Ashoka Mody recently retired from Princeton University. He previously worked for the World Bank and the International Monetary Fund. He is the author of India is Broken: A People Betrayed, Independence to Today (2023).

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