India’s Chief Statistician Dr TCA Anant was a professor of Economics at the Delhi School of Economics and had also served as Member Secretary of the Indian Council of Social Science Research. Dr Anant served in a number of expert committees of various ministries of the Government of India, RBI and the Competition Commission of India.

As the country continues to grapple with shortage of cash after the withdrawal of legal tender status of high denomination currency notes, industrial growth measured by the Index of Industrial Production declined sharply in November at 3.2 per cent. In an interview, Dr Anant said the government is going to come out with a new IIP index in the next calendar year. Excerpts

Q: Let me start with something that has made the entire nation stand in long serpentine queues outside banks and ATMs. Your views on demonetization.

A: I have stated this when people talked to me during the second quarter release. At the moment, there are no statistics on the basis of which you can make an assessment on the impact. Everybody’s response is based on certain assumptions and it is really a discussion of my assumption versus your assumption. I am not going to get into that. When the data is available, then it will be possible to do careful analytical work on what the impact was. I am not going to say anything at this stage.

Q: Former Prime Minister Manmohan Singh and even your predecessor Pranob Sen have been quite vocal and said the move is going to terribly hurt the economy and GDP will decline by at least 2 per cent.

A: Look, I have said I am not going to comment any further on this, even if you keep asking the question.

Q: Okay then… Let me ask you something related to your area of work. What are the nominal GDP figures you are going to provide to the finance ministry for the purpose of preparing the budget?

A: We are going to make an estimate on GDP according to very set principles of estimation. We will look at all the data which is available till the month of December. Based on that, and using statistical technique, which is well described by national accounts called benchmark indicator method, the benchmark in this case being last year’s GDP, which we have released in the month of May. We will make an estimate for the full year. But let me point out that budget making is a complicated exercise. These numbers are used merely as descriptives. On the mechanics by which the government makes the budget and the parameters which enter the discussion you can talk to the finance ministry.

Q: So do you think the government estimate of 7.6 per cent growth rate is achievable?

A: It’s not for me to say right now. I will give you an advance estimate based on the parameters which I told you in the month of January.

Q: How do you see inflation faring in the next couple of months?

A: I don’t have a good forecasting model for inflation, so I am not in a position to say. But all I can tell you is that there are two things to keep in mind when looking at inflation. One, we have seen CPI inflation below 6% now for almost a year or more. Principally, any inflation is a combination of the general gap between the demand and supply. The assessment based on all the information which is available to us till now in terms of availability of items of mass consumption — particularly food — is that the availability is not going to get worse than last year, it is only going to improve. In that likelihood, I don’t see any negative sides of inflation at the moment. So I expect the current pattern to continue.

Q: Can you give us a trend on the IIP numbers since you are not comfortable forecasting?

A: Trend is difficult to do because in IIP, the trend is complicated by the fact that monthly production in India is highly seasonal. You have to adjust for seasonality. The seasonality adjustment in India is further complicated by the fact that we don’t have a defined periodicity to assess seasonality. We have a number of festivals whose occurence dates change from year to year based on the calendar they follow. This makes it difficult to use a mechanism for seasonal adjustment formula in India.

Q: Anything on changing the basket of GDP or IIP numbers.

A: For IIP numbers there is an exercise underway which we hope will get completed soon. The data is compiled from a number of administrative departments across multiple ministries. Since regular data has to be compiled from them there is a process of getting their consent into the application process that is going on. We expect it to be completed soon.

The basket has been revised but the details we will announce. When we announce the revised series there is usual addition of commodities, deletion of commodities based on changing production and consumption pattern of the economy. The weights have also been suitably changed keeping in mind the changed structure of production of the economy from 2004-2011. Things will become clear when the new IIP series is released.

Q: So when does the government plan to launch the new IIP series index?

A: It is not easy for me to give timelines, but it will be notified soon. The process is on, it will happen.