Is Indian GDP data turning a little too Chinese? Why to be Askance @ India’s Growth Figures?

India defied expectations on Tuesday to retain the title of the world’s fastest growing major economy, despite the pain caused by Prime Minister Narendra Modi’s shock crackdown on cash.

Annual gross domestic product (GDP) growth for the October-December period came in at 7.0 per cent, a tad slower than 7.4 per cent in the previous quarter but much faster than the 6.4 per cent expansion forecast by economists in a Reuters poll. Economists are scratching their heads its almost seen for the economy is untouched by demonetisation now you are one of the strongest defendant of demonetisation. Would you agree that the economy was almost left untouched by demonetisation some pain was warranted was it not?

Shaktikanta Das: As we have explained earlier, we have to go by real statistics. Now, when the Q2 figures where the second quarter figures for the current year released the advanced estimates were released that time also we had explained that we have to go by real statistics and not by anecdotal evidence.

Being the fastest-growing large economy in the world is India’s destiny, and even the most poorly conceived economic policy imaginable can’t stop destiny….To say the data is startling is an understatement. The IMF had predicted that India would grow at around 6 percent in the half-year after “demonetisation,” as it’s called. Most independent economists forecast GDP growth would come in somewhere between 6 and 7 percent. Those economists naturally assumed that withdrawing 86 percent of the country’s currency and reducing access to bank accounts would dampen private consumption.  

Yet if one believes the government’s numbers, taking away most of India’s cash overnight didn’t hurt private spending at all. In fact, private consumption rose by 10.1 percent over the quarter. That’s the highest growth in spending in over five years, and it came at a time when consumer confidence was falling sharply. 

My take on the statistics:

Well, this is a simple tweaking of the equations that differentiate the growth curve. In short, we have all been a part of exams where 9/10 is different from 99/100, even if just one number distances the actual score from the maximum one could score. On similar lines, the crimes of growth are factored in on growth year/base year. This is mathematical jugglery narrowed in on political ends. Whichever way one looks at the data, some of the indicators are still found lagging the composite growth, thereby dumbing down the economists when the growth curve mandates a pattern recognition.

GDP, when calculated at Factor Cost is related with GDP at Market Price, and written as an equation of the form,

GDP (FC) = GDP (MP) – indirect takes + subsidies

While, Gross Value Added,

GVA (basic prices) = Sum (net of production taxes & subsidies) to GDP (factor cost)

Stamp duties and property taxes make up the production taxes, whereas labour, capital and investment subsidies are the other half. Why is this done? To inflate GDP after it starts representing the GDP of a country in terms of total GVA, i.e. without discounting for depreciation. Moreover, GDP at market price adds taxes and deducts subsidies on products and services to GDP at factor cost. The sum total of the GVA in various economic activities is called the GDP at factor cost. With a change in method and a subsequent change in base year, India has increased or rather expanded its manufacturing base in the sense of capturing it.  This has also enabled the country to include informal sectors, which hitherto had not found its true manifestation. This is mere adherence to standards that become internationalized.

Now, what happens in India’s case is the part subsidies, which has been the fixed denominator for our GDP, unlike most of the developed world, or even the developing economies. So, our GDP hitherto had largely been GDP (FC). After rearranging the equation above, GDP (FC) would have subtraction of the subsidies part, and yield GDP (MP), thus changing the base completely, and giving a large share of the economy as growing, rather than the dismal one predicted in the wake of demonetization. This has been effectuated since 2012 implying that whatever happens after demonetization, the growth period would project only redundant figures. Slip that into the quarterly period, and yes, the new base would indicate a growing economy, as used by the WB/IMF to forecast India growing more than China. So, there is nothing really dastardly an act here, but more about how to integrate the parts into the composite to yell at the world, we are growing.

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Ideology

For Žižek, we are not so much living in a post-ideological era as in an era dominated by the ideology of cynicism. Adapting from Marx and Sloterdijk, he sums up the cynical attitude as “they know that, in their activity, they are following an illusion, but still, they are doing it”. Ideology in this sense, is located in what we do and not in what we know. Our belief in an ideology is thus staged in advance of our acknowledging that belief in “belief machines”, such as Althusser’s Ideological State Apparatuses. It is “belief before belief.”

One of the questions Žižek asks about ideology is: what keeps an ideological field of meaning consistent? Given that signifiers are unstable and liable to slippages of meaning, how does an ideology maintain its consistency? The answer to this problem is that any given ideological field is “quilted” by what, following lacan, he terms a point de capiton (literally an “upholstery button” though it has also been translated as “anchoring point”). In the same way that an upholstery button pins down stuffing inside a quilt and stops it from moving about, Žižek argues that a point de capiton is a signifier which stops meaning from sliding about inside the ideological quilt. A point de capiton unifies an ideological field and provides it with an identity. Freedom, i.e, is in itself an open-ended word, the meaning of which can slide about depending on the context of its use. A right-wing interpretation of the word might use it to designate the freedom to speculate on the market, whereas a left-wing interpretation of it might use it designate freedom from the inequalities of the market. The word “freedom” therefore does not mean the same thing in all possible worlds: what pins its meaning down is the point de capiton of “right-wing” or “left-wing”. What is at issue in a conflict of ideologies is precisely the point de capiton – which signifier (“communism”, “fascism”, “capitalism”, “market economy” and so on) will be entitled to quilt the ideological field (“freedom”, “democracy”, Human rights” and so on).

Žižek distinguishes three moments in the narrative of an ideology.

1. Doctrine – ideological doctrine concerns the ideas and theories of an ideology, i.e. liberalism partly developed from the ideas of John Locke.

2. Belief – ideological belief designates the material or external manifestations and apparatuses of its doctrine, i.e. liberalism is materialized in an independent press, democratic elections and the free market.

3. Ritual – ideological ritual refers to the internalization of a doctrine, the way it is experienced as spontaneous, i.e in liberalism subjects naturally think of themselves as free individuals.

These three aspects of ideology form a kind of narrative. In the first stage of ideological doctrine we find ideology in its “pure” state. Here ideology takes the form of a supposedly truthful proposition or set of arguments which, in reality, conceal a vested interest. Locke’s arguments about government served the interest of the revolutionary Americans rather than the colonizing British. In a second step, a successful ideology takes on the material form which generates belief in that ideology, most potently in the guise of Althusser’s State Apparatuses. Third, ideology assumes an almost spontaneous existence, becoming instinctive rather than realized either as an explicit set of arguments or as an institution. the supreme example of such spontaneity is, for Žižek, the notion of commodity fetishism.

In each of these three moments – a doctrine, its materialization in the form of belief and its manifestation as spontaneous ritual – as soon as we think we have assumed a position of truth from which to denounce the lie of an ideology, we find ourselves back in ideology again. This is so because our understanding of ideology is based on a binary structure, which contrasts reality with ideology. To solve this problem, Žižek suggests that we analyze ideology using a ternary structure. So, how can we distinguish reality from ideology? From what position, for example, is Žižek able to denounce the New Age reading of the universe as ideological mystification? It is not from the position in reality because reality is constituted by the Symbolic and the Symbolic is where fiction assumes the guise of truth. The only non-ideological position available is in the Real – the Real of the antagonism. Now, that is not a position we can actually occupy; it is rather “the extraideological point of reference that authorizes us to denounce the content of our immediate experience as ‘ideological.'” (Mapping Ideology) The antagonism of the Real is a constant that has to be assumed given the existence of social reality (the Symbolic Order). As this antagonism is part of the Real, it is not subject to ideological mystification; rather its effect is visible in ideological mystification. Here, ideology takes the form of the spectral supplement to reality, concealing the gap opened up by the failure of reality (the Symbolic) to account fully for the Real. While this model of the structure of reality does not allow us a position from which to assume an objective viewpoint, it does presuppose the existence of ideology and thus authorizes the validity of its critique. The distinction between reality and ideology exists as a theoretical given. Žižek does not claim that he can offer any access to the “objective truth of things” but that ideology must be assumed to exist if we grant that reality is structured upon a constitutive antagonism. And if ideology exists we must be able to subject it to critique. This is the aim of Žižek’s theory of ideology, namely an attempt to keep the project of ideological critique alive at all in an era in which we are said to have left ideology behind.

Emergentic Philosophy or Defining Complexity

If the potential of emergence is not pregnant with what emerges from it, then emergence becomes just a gobbledygook (generally unintelligible) of abstraction and obscurity. What is this differentiation all about? The origin of differentiation is to be located in what has already been actualized. Thus, potential is not only abstract, but relative. Abstract, since, potential could come to mean a host of other things than that what it is meant for, and relative, since it is dependent on intertwinings within which it could unfold. Potentiality is creative for philosophy, through an expansive notion of unity through assemblages of multiple singularities helping dislodge anthropocentric worldviews that insist on rationale of the world as a solid and stable structure. A way out is to think in terms of liquid structures, where power to self-organize and untouched by any human static control allows for an existence at the edge of creative and flowing chaos. Such a position is tangible in history as a confluence of infinite variations, and rooted in materialism of a revived form. Emergence is a diachronic construction of functional structures in complex systems attaining a synchronic coherence of systemic behavior during the process of arresting the individual component’s behavior, so very crucial in ramifications for addressing burning questions in the philosophy of science, especially the ones concerning reductionism. Complexity investigates emergent properties, certain regularities of behavior that somehow transcend the ingredients that make them up. Complexity argues against reductionism, against reducing the whole to the parts. And in doing so, it transforms scientific understanding of far-from-equilibrium structures of irreversible times and of non-Euclidean spaces.