Govt blundered on Jan IIP, cuts it from 6.8% to 1.1%

New Delhi:The government faced a major embarrassment on Thursday when it sharply revised the industrial production data for January, with the growth rate lowered to 1.1% from the previously reported 6.8%. Finance minister Pranab Mukherjee termed the sharp revision as "disappointing". 

    For a change, the Central Statistics Office admitted that the error was due to "incorrect reporting" of the sugar production data. Chief statistician T C A Anant said the error was detected at the time of compilation of IIP for February. He said sugar production had been wrongly taken as 134.08 lakh tonne instead of the actual figure of 58.09 lakh tonne. Experts say GDP growth may be lower than 6.9% 

New Delhi: Chief statistician T V A Anant blamed the incorrect IIP figure for January on wrong reporting by the ministry of consumer affairs, food and public distribution. As a result, the growth in the consumer nondurables segment was lowered to 11% instead of 42% reported earlier. Overall, consumer goods growth slowed to 2.9% from 20.2% estimated last month. 

    While economists and even the RBI have been questioning the quality of data, when asked, Anant told TOI: "This is aone-off event. It is because of an unusual occurrence." 

    The capital goods sector too has remained volatile for the past few months, and there have been sharp revisions, drawing criticism from economists. The error in the January IIP data comes close on the heels of the sharp correction in the export numbers that was attributed to a software glitch. Economists said the revision would mean that GDP growth would be lower than the previously estimated 6.9% in 2011-12. 

    "February's IIP data reinforces the reality of a slowdown in industrial activity. However, even more telling of the trend decline in growth was the very significant downward revision in January's data print, removing the outlier characteristic of the initial number," said Saugata Bhattacharya, senior vice-president at Axis Bank. 

    When the January data was released last month, TOI had flagged the reasons for the unexpected rebound in industrial activity and pointed to the 93% rise in food and beverages output and a surge in tobacco production.