PRINCETON, New Jersey ¨C The late, sharp-witted economist Michael Mussa, my first boss at the International Monetary Fund, once told me that every statistic must pass the ¡°smell test.¡± I recalled this sage advice recently when Indian authorities published the first driblets of a consumption survey in over a decade. The numbers stink.
Economists have long maintained that India¡¯s official gross domestic product data overstate growth. Before the September 2023 Group of 20 summit in New Delhi, the Indian National Statistical Office issued a particularly brazen overestimate. The last decennial census was in 2011. A survey highlighting stubbornly high malnutrition and anemia cost the survey¡¯s director his job.
The last comprehensive consumption-expenditure survey in 2012 showed 22% living in poverty. The government junked a 2018 survey when leaked data indicated an increase in the poverty rate. Not surprisingly, the new partial consumption figures generated much excitement. Hastily, Surjit Bhalla, India¡¯s former executive director at the IMF, and economist Karan Bhasin proclaimed ¡ª under the Brookings Institution¡¯s imprimatur ¡ª that extreme poverty has been ¡°eliminated.¡±
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