Thursday, February 26, 2015

Pakistan Deploys Big Data to Fight Terror

Pakistan has started verifying identities of over 135 million cell phone users through fingerprints. The massive exercise is being described by Washington Post as the "world’s largest — and fastest — efforts to collect biometric information". The deadline for completion is March 14, 2015.


Several countries, including South Africa and India, have recently implemented broad systems for collecting and storing their citizens biometric information. But analysts and communications experts say they can’t recall a country trying to gather biometrics as rapidly as Pakistan is doing, according to the Washington-based American newspaper.


In addition to setting up biometric verification systems at tens of thousands of retail points run by carriers, the cellphone companies have launched massive advertising campaigns and sent mobile vans around the country to accelerate the process. About half of all SIMs have so far been verified.

The companies are warning subscribers that their SIM (subscriber identity module) cards will not work unless the owners' fingerprints are  entered and verified against the database maintained by the National Database Registration Authority (NADRA). They have to show their computerized national identity cards (CNICs) and fingerprints. If the scanner matches their print with the one in a government database, they can keep their SIM card. If not, or if they don't show up, their cellphone service is cut off.

The current SIM registration drive is part of the government's new counter terrorism campaign. Cellphones have been used in the past to detonate explosive devices as well as to make extortion calls. Identification of SIM cards is expected to discourage such acts of terror and help track down the perpetrators.

The use of Big Data like Pakistan's biometric database is not limited to catching terrorists and criminals. It can also be used to significantly improve governance. Here's how Tariq Malik, the architect of Pakistan's NADRA, describes it in a recent piece for Forbes magazine:

BIG Data can now be leveraged for a variety of public uses, and re-uses. It can strengthen the link between citizens and state to enhance state capacity, and its applications are varied—ranging from disaster management to social service delivery.  

Collecting, storing and processing structured and unstructured information is an endeavor that is both massive and meticulous. But thanks to advancing big data technology, it’s more feasible today than ever before. BIG Data can now be leveraged for a variety of public uses, and re-uses. It can strengthen the link between citizens and state to enhance state capacity, and its applications are varied—ranging from disaster management to social service delivery. 

Consider Pakistan’s National Database And Registration Authority (NADRA) that houses one of the world’s largest multi-biometric citizens database, consisting of ten fingerprints, digital photographs and biographic attributes of each citizen. More than 121 million identities are stored in this database. When floods suddenly hit Pakistan in 2010, over 20 million citizens were displaced. Government wanted to provide monetary subsistence and aid for the rehabilitation and reconstruction effort; however, the problem was that while traditional aid could be dropped via helicopter, cash could not. They were further challenged with verifying claimants; specifically, identifying whether or not they belonged to a calamity hit area. 

 How could Pakistan support those affected by the disaster? The NADRA had a simple task to perform: cross verify citizen thumb prints with information stored in its database, then check their permanent address. The result was nothing short of miraculous. Essentially, big data allowed policymakers to know who the victims were and where they lived at the time of the crisis. Smart cards were quickly loaded with cash to help victims with rehabilitation efforts. More than $1 billion U.S. was disbursed without a single misappropriated penny. The process was swift and transparent, and international auditors were taken aback. 

All of this made international aid donors happy, since it cut down their cost of administration, eliminated doubts of corruption and narrowed the trust deficit. But more importantly, the state enforced its writ and citizens realized for the first time that the state is there for them in times of need. 

At last count, just 800,000 of Pakistan’s 180 million people paid direct taxes. Integrating data across various government databases, then reconciling it with the citizen database along with NADRA big data analytics helped identify 3.5 million tax evaders. It is estimated that if a basic minimum tax rate were applied, Pakistan would have $3.5 billion right away. Although big data analytics is no substitute for radical reform, it at least generates a healthy debate for tax reform. 

It’s been argued that state capacity is essentially “extractive capacity”; the ability to effectively tax its citizens and plough it back for public welfare. Advanced data analytics on big data provides an important linchpin in this ongoing debate. As NADRA’s experience illustrates, many fragile states face an even more basic challenge: the ability to accurately count and register its citizens. To collect and process big data in a way that does not compromise citizen privacy can have powerful development externalities, including the ability to build state capacity through tax collection—and avoid approaching the International Monetary Fund with a begging bowl. 

Big data analytics for government is a rapidly evolving field, offering exciting opportunities that, when explored and applied, can help fragile states uncover powerful and effective methods for optimizing governance.


Related Links:

Haq's Musings

Pakistan Leads in Biometric IT Services

3G-4G Rollout in Pakistan 

Is India's AAdhaar Copied From Pakistan's NADRA?

Mobile Broadband in Pakistan








Wednesday, February 25, 2015

Rebutting Western Narrative: "India Rising Pakistan Collapsing"

Is it true that "India is rising and Pakistan is rapidly collapsing", the currently accepted western narrative recently re-iterated by Roger Cohen in his New York Times Op Ed from Lahore, Pakistan? Let's examine it by reviewing reports filed by several Indian journalists after their recent visits to Pakistan:

"India is a democracy and a great power rising. Pakistan is a Muslim homeland that lost half its territory in 1971, bounced back and forth between military and nominally democratic rule, never quite clear of annihilation angst despite its nuclear weapons".

Roger Cohen's  New York Times Op Ed "Pakistan in Its Labyrinth"

"I.. saw much in this recent visit (to Pakistan) that did not conform to the main Western narrative for South Asia -- one in which India is steadily rising and Pakistan rapidly collapsing. Born of certain geopolitical needs and exigencies, this vision was always most useful to those who have built up India as an investment destination and a strategic counterweight to China....Seen through the narrow lens of the West’s security and economic interests, the great internal contradictions and tumult within these two large nation-states disappear. In the Western view, the credit-fueled consumerism among the Indian middle class appears a much bigger phenomenon than the extraordinary Maoist uprising in Central India".  

Pankaj Mishra's Bloomberg Op Ed "Pakistan’s Unplanned Revolution Rewrites Its Future"

Compare and contrast the two narratives of two seasoned journalists, American Roger Cohen and Indian Pankaj Mishra, on their  recent Pakistan visits. Note Mishra's explanation of why the western media is parroting the standard post Cold War western narrative about India and Pakistan as "seen through the narrow lens of the West’s security and economic interests", "born of certain geopolitical needs and exigencies".

Now read the following post titled Indians Share "Eye-Opener" Stories of Pakistan that I wrote in July 2012.  It's reproduced below:

Several prominent Indian journalists and writers have visited Pakistan in recent years for the first time in their lives.  I am sharing with my readers selected excerpts of the reports from Mahanth Joishy (USIndiaMonitor.com), Panakaj Mishra (Bloomberg), Hindol Sengupta (The Hindu), Madhulika Sikka (NPR) and Yoginder Sikand (Countercurrents) of what they saw and how they felt in the neighbor's home. My hope is that their stories will help foster close ties between the two estranged South Asian nations.

Mahanth S. Joishy, Editor, usindiamonitor.com :  (July, 2012)

Many of us travel for business or leisure.  But few ever take a trip that dramatically shatters their entire worldview of a country and a people in one fell swoop.  I was lucky enough to have returned from just such a trip: a week-long sojourn in Pakistan.

It was a true eye-opener, and a thoroughly enjoyable one at that.  Many of the assumptions and feelings I had held toward the country for nearly 30 years were challenged and exposed as wrong and even ignorant outright.
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 The Western and Indian media feed us a steady diet of stories about bomb blasts, gunfights, kidnappings, torture, subjugation of women, dysfunctional government, and scary madrassa schools that are training the next generation of jihadist terrorists.  And yes, to many Westerners and especially Indians, Pakistan is the enemy, embodying all that is wrong in the world.  Incidents such as the beheading of American journalist Daniel Pearl, 26/11 and the Osama Bin Laden raid in Abottobad have not helped the cause either.  Numerous international relations analysts proclaim that  Pakistan is “the most dangerous place in the world” and the border with India is “the most dangerous border in the world.”
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(Upon arrival in Karachi) two uniformed bodyguards with rifles who were exceedingly friendly and welcoming climbed onto the pickup truck bed as we started on a 45-minute drive.  I was impressed by the massive, well-maintained parks and gardens surrounding the airport.  I was also impressed by the general cleanliness, the orderliness of the traffic, the quality of the roads, and the greenery. Coming from a city government background, I was surprised at how organized Karachi was throughout the ride.  I also didn’t see many beggars the entire way.  I had just spent significant amounts of time in two major Indian cities, Mumbai and Bangalore, as well as several second-tier cities like Mangalore, and none would compare favorably on maintenance and city planning, especially when it came to potholes and waste management.  This was the first surprise; I was expecting that piles of garbage and dirt would line the roads and beggars would overflow onto the streets.  Surely there is dirt and poverty in Karachi, but far less than I was expecting.  Karachi was also less dense and crowded than India’s cities.


My second pleasant surprise was to see numerous large development projects under way.  I had read about Pakistan’s sluggish GDP growth and corruption in public works and foreign aid disbursement.  This may be true, but construction was going on all over the place: new movie theaters, new malls, new skyscrapers,  new roads, and entire new neighborhoods being built from scratch.  In this regard it was similar to India and every other part of Asia I had seen recently: new development and rapid change continues apace, something we are seeing less of in the West.
 -----------------------
 We were also able to do some things which may sound more familiar to Americans: bowling at Karachi’s first bowling alley, intense games of pickup basketball with some local teenagers at a large public park (these kids could really play), or passing through massive and well-appointed malls filled with thousands of happy people of all ages walking around, shopping, or eating at the food court.  We even attended a grand launch party for Magnum ice cream bars, featuring many of Pakistan’s A-list actors, models, and businesspeople.  A friend who is involved in producing musicals directed an excellent performance at the party, complete with live band, singing, and dancing.  This troupe, Made for Stage has also produced shows such as the Broadway musical Chicago to critical acclaim with an all-Pakistani cast for the first time in history.


Even the poor areas we visited, such as the neighborhoods around the Mazar, were filled with families coming out for a picnic or a stroll, enjoying their weekend leisure time in the sun.  All I could see were friendly and happy people, including children with striking features running around.  At no time did I feel the least bit unsafe anywhere we went, and we definitely went through a mix of neighborhoods with varying profiles.
 ------------------------------------------
 Lahore is more beautiful overall than Karachi or any large Indian city I’ve seen.  Serious effort has gone into keeping the city green and preserving its storied history.  Historians would have a field day here.  In particular we saw two stunning historic mosques, the Wazir Khan and the Badshahi, both of which should be considered treasures not only for Muslims, Pakistanis, or South Asia, but for all of humanity.  I felt it a crime that I’d never even heard of either one.  Each of them in different ways features breath-taking architecture and intricate artwork comparable to India’s Taj Mahal.  These are must-see sights for any tourist to Lahore.  The best way to enjoy the vista of the Badshahi mosque is to have a meal on the rooftop of one of the many superb restaurants on Food Street next to the mosque compound.  This interesting area was for hundreds of years an infamous red-light district, made up of a series of old wooden rowhouses that look like they were lifted straight out of New Orleans’ Bourbon Street, strangely juxtaposed with one of the country’s holiest shrines.  From the roof of Cuckoo’s Den restaurant, we could see all of the massive Badshahi complex along with the adjoining royal fortress, all while having a 5-star meal of kebabs, spicy curries in clay pots, and lassi under the stars.  We were fortunate to have very pleasant whether as well.  This alfresco dining experience with two good friends encompassed my favorite moments in the  city.


We did much more in Lahore.  We were given a tour of the renowned Aitchison College, which one of my friends attended.  This boys’ private prep school is known for its difficult entrance exams, rigorous academic tradition, illustrious list of alumni since the British founded the school, and its gorgeous and impeccably maintained 200-acre campus that  puts most major universities icluding my own Georgetown to shame.  Aitchison has been considered one of the best prep schools on the subcontinent since 1886.  However, it would have been impossible to get a tour without the alumni connection because security is very thorough.


Pankaj Mishra, Bloomberg:  (April, 2012)

...I also saw much in this recent visit that did not conform to the main Western narrative for South Asia -- one in which India is steadily rising and Pakistan rapidly collapsing.

Born of certain geopolitical needs and exigencies, this vision was always most useful to those who have built up India as an investment destination and a strategic counterweight to China, and who have sought to bribe and cajole Pakistan’s military-intelligence establishment into the war on terrorism.

Seen through the narrow lens of the West’s security and economic interests, the great internal contradictions and tumult within these two large nation-states disappear. In the Western view, the credit-fueled consumerism among the Indian middle class appears a much bigger phenomenon than the extraordinary Maoist uprising in Central India.
------------
Traveling through Pakistan, I realized how much my own knowledge of the country -- its problems as well as prospects -- was partial, defective or simply useless. Certainly, truisms about the general state of crisis were not hard to corroborate. Criminal gangs shot rocket-propelled grenades at each other and the police in Karachi’s Lyari neighborhood. Shiite Hazaras were being assassinated in Balochistan every day. Street riots broke out in several places over severe power shortages -- indeed, the one sound that seemed to unite the country was the groan of diesel generators, helping the more affluent Pakistanis cope with early summer heat.

In this eternally air-conditioned Pakistan, meanwhile, there exist fashion shows, rock bands, literary festivals, internationally prominent writers, Oscar-winning filmmakers and the bold anchors of a lively new electronic media. This is the glamorously liberal country upheld by English-speaking Pakistanis fretting about their national image in the West (some of them might have been gratified by the runaway success of Hello magazine’s first Pakistani edition last week).

But much less conspicuous and more significant, other signs of a society in rapid socioeconomic and political transition abounded. The elected parliament is about to complete its five- year term -- a rare event in Pakistan -- and its amendments to the constitution have taken away some if not all of the near- despotic prerogatives of the president’s office.

Political parties are scrambling to take advantage of the strengthening ethno-linguistic movements for provincial autonomy in Punjab and Sindh provinces. Young men and women, poor as well as upper middle class, have suddenly buoyed the anti-corruption campaign led by Imran Khan, an ex-cricketer turned politician.

After radically increasing the size of the consumerist middle class to 30 million, Pakistan’s formal economy, which grew only 2.4 percent in 2011, currently presents a dismal picture. But the informal sector of the economy, which spreads across rural and urban areas, is creating what the architect and social scientist Arif Hasan calls Pakistan’s “unplanned revolution.” Karachi, where a mall of Dubai-grossness recently erupted near the city’s main beach, now boasts “a first world economy and sociology, but with a third world wage and political structure.”

Even in Lyari, Karachi’s diseased old heart, where young gangsters with Kalashnikovs lurked in the alleys, billboards vended quick proficiency in information technology and the English language. Everywhere, in the Salt Range in northwestern Punjab as well as the long corridor between Lahore and Islamabad, were gated housing colonies, private colleges, fast- food restaurants and other markers of Pakistan’s breakneck suburbanization....

Hindol Sengupta, The Hindu: (May, 2010)

Add this bookstore to the list of India-Pakistan rivalry. A bookstore so big that it is actually called a bank. The book store to beat all bookstores in the subcontinent, I have found books I have never seen anywhere in India at the three-storeyed Saeed Book Bank in leafy Islamabad. The collection is diverse, unique and with a special focus on foreign policy and subcontinental politics (I wonder why?), this bookstore is far more satisfying than any of the magazine-laden monstrosities I seem to keep trotting into in India. ...







Yes, that's right. The meat. There always, always seems to be meat in every meal, everywhere in Pakistan. Every where you go, everyone you know is eating meat. From India, with its profusion of vegetarian food, it seems like a glimpse of the other world. The bazaars of Lahore are full of meat of every type and form and shape and size and in Karachi, I have eaten some of the tastiest rolls ever. For a Bengali committed to his non-vegetarianism, this is paradise regained. Also, the quality of meat always seems better, fresher, fatter, more succulent, more seductive, and somehow more tantalizingly carnal in Pakistan. ....

Let me tell you that there is no better leather footwear than in Pakistan. I bought a pair of blue calf leather belt-ons from Karachi two years ago and I wear them almost everyday and not a dent or scratch! Not even the slightest tear. They are by far the best footwear I have ever bought and certainly the most comfortable. Indian leather is absolutely no match for the sheer quality and handcraftsmanship of Pakistani leather wear.

Yes. Yes, you read right. The roads. I used to live in Mumbai and now I live in Delhi and, yes, I think good roads are a great, mammoth, gargantuan luxury! Face it, when did you last see a good road in India? Like a really smooth road. Drivable, wide, nicely built and long, yawning, stretching so far that you want zip on till eternity and loosen the gears and let the car fly. A road without squeeze or bump or gaping holes that pop up like blood-dripping kitchen knives in Ramsay Brothers films. When did you last see such roads? Pakistan is full of such roads. Driving on the motorway between Islamabad and Lahore, I thought of the Indian politician who ruled a notorious —, one could almost say viciously — potholed state and spoke of turning the roads so smooth that they would resemble the cheeks of Hema Malini. They remained as dented as the face of Frankenstein's monster. And here, in Pakistan, I was travelling on roads that — well, how can one now avoid this? — were as smooth as Hema Malini's cheeks! Pakistani roads are broad and smooth and almost entirely, magically, pot hole free. How do they do it; this country that is ostensibly so far behind in economic growth compared to India? But they do and one of my most delightful experiences in Pakistan has been travelling on its fabulous roads. No wonder the country is littered with SUVs — Pakistan has the roads for such cars! Even in tiny Bajaur in the North West frontier province, hard hit by the Taliban, and a little more than a frontier post, the roads were smoother than many I know in India. Even Bajaur has a higher road density than India! If there is one thing we should learn from the Pakistanis, it is how to build roads. And oh, another thing, no one throws beer bottles or trash on the highways and motorways.

Madhulika Sikka, NPR News: (May, 2010)

This may be hard to believe, but the first thing that crosses your mind when you drive into Islamabad is suburban Virginia — its wide roads, modern buildings, cleanliness and orderliness is a complete contrast to the hustle and bustle of the ancient city of Lahore, some 220 miles east on the Grand Trunk Road.



Islamabad is laid out in a grid with numbered avenues running north to south. The streets are tree lined and flowers abound among the vast open stretches of green space.

Perhaps one of the most beautiful spots is the Margallah Hills National Park. Drive up the winding road on the northern edge of town to the scenic view points and you'll see the broad planned city stretch before you.
It's a Sunday afternoon and you could be in any park in any city in the world. Families are out for a stroll and picnicking on park benches. There's a popcorn vendor and an ice cream seller. Kids are playing on a big inflatable slide. Peacocks strut their full plumage as people are busily clicking away on their cellphone cameras. Lively music permeates the air as souvenir sellers are hawking their wares. Off one of the side paths I notice a young couple lunching at a bench, a respectable distance apart from each other but clearly wanting to be alone.

So what's it like here? It's pretty much like everywhere else. On a quiet Sunday afternoon people are out with their families, relaxing and enjoying themselves, taking a break from the stresses and strains of daily life. For all of us this is an image of Pakistan worth remembering. I certainly will.
Yoginder Sikand, Countercurrents.org : (June, 2008)

Islamabad is surely the most well-organized,picturesque and endearing city in all of South Asia. Few Indians would, however, know this, or, if they did, would admit it. After all, the Indian media never highlights anything positive about Pakistan, because for it only 'bad' news about the country appears to be considered 'newsworthy'. That realization hit me as a rude shock the moment I stepped out of the plane and entered Islamabad's plush International Airport, easily far more efficient, modern and better maintained than any of its counterparts in India. And right through my week-long stay in the city, I could not help comparing Islamabad favorably with every other South Asian city that I have visited. That week in Islamabad consisted essentially of a long string of pleasant surprises, for I had expected Islamabad to be everything that the Indian media so uncharitably and erroneously depicts Pakistan as. The immigration counter was staffed by a smart young woman, whose endearing cheerfulness was a refreshing contrast to the grave, somber and unwelcoming looks that one is generally met with at immigration counters across the world that make visitors to a new country feel instantly unwelcome.

Here's a Pakistan Pictorial:
Find more photos like this on PakAlumni Worldwide: The Global Social Network

Sunday, February 15, 2015

Construction Boom Sets New Record For Cement Sales in Pakistan

Domestic cement sales are up 9% year-over-year for the first 7 months of Pakistan's Fiscal 2014-15, according to media reports.  Overall, cement industry reports cement shipment of over 20 million tons in 7 months, a 6% annual increase with rising domestic demand offsetting falling exports due to weakness abroad.

Market capitalization of  Pakistani cement companies has jumped 70% last year, about 3 times more than the KSE-100 market index which rose 27% in 2014. This is the third consecutive year that cement companies have outperformed the broader market. Investors in Pakistan's cement sector have seen 600% rise in the last three years.

It appears that construction  sector is getting a boost from falling inflation and declining interest rates with a big drop in world oil prices. Domestic sales of 2.5 million tons a month translate to about 160 Kg per capita consumption of cement, the highest level in Pakistan's history.

















Pakistan saw its domestic cement consumption double from about 11 million tons in 2003 to 22 million tons in 2008 on President Musharraf's watch. It remained essentially flat from 2009 through 2011 before rising to a new high of 24 million tons in 2012. With expected GDP annual growth to average 4.5-5.5 per cent over the next 3 years, local cement sales could rise by 9 per cent on average annually to reach 34 million tons per year by 2017 and exports to 8 million tons per year.

Cement sales and building activity indicators are an important sign of the strength or weakness of the broader economy, due to construction's important role in the economic sector. If individuals and businesses are willing to invest in new construction, it is a sign that the economy is doing well or poised to recover. If they aren't, the economy may be weak or headed for trouble. Construction is a very labor-intensive activity which creates many new jobs. Higher employment drives consumer spending which further stimulates the national economy.

In addition to rising demand for housing and new commercial real-estate, major infrastructure and energy projects related to the China-Pakistan Industrial Corridor are expected to significantly boost domestic cement consumption and create millions of new jobs over the next several years.

Related Links:

Haq's Musings

State Bank: Pakistan's Actual GDP Higher Than Official Figures

Investors Bullish on Pakistan Cement Sector

Pakistan Ranks in the Middle For Infrastructure and Logistics

China-Pakistan Industrial Corridor

India Fudging GDP to Claim Faster Growth Than China?

India-Pakistan Economic Comparison 2014

Tuesday, February 10, 2015

Pakistan Ranks in the Middle For Logistics and Trade

The World Bank’s (WB) Logistics Performance Index (LPI) ranks Pakistan at number 72 for 2014, out of 160 countries.



LPI  is ranking is based the efficiency of customs, border management and clearance as well as the quality of trade and transportation infrastructure. It also comprehends the quality of logistics services, the ability to track and trace consignments and the frequency at which shipments correctly reach their destinations on schedule.

The first LPI survey conducted in 2007 ranked Pakistan at number 68, which fell to a low of 110 in 2010 before recovering to 71st position in 2012.

Logistics performance is an important indicator of a nation's level of development and its ability to participate in global trade.



Another similarly important indicator is the ranking of a country on OECD survey of economic complexity compiled by Massachusetts Institute of Technology.  This indicator comprehends the diversity of products ad services traded and the number of trading partners. The more diverse the trade and trading partners, the higher the rank. Pakistan ranks 91 on this index among 144 countries as of 2012. It ranks higher than single-commodity oil exporting nations  like Iran and Saudi Arabia but lower than the newly industrialized Asian nations.

While Pakistan has made some progress on logistics and trade, it still has a long way to go to improve the lives of its citizens through infrastructure improvements and diversification of its products and services trade. Timely execution of Pak-China industrial corridor plans will hopefully help Pakistan make progress on this front.

Related Links:

Haq's Musings

Pak-China Industrial Corridor

India-Pakistan Economic Comparison 2014

Pakistan's Infrastructure

Challenging Haqqani's Op Ed: "Pakistan's Elusive Quest For Parity"

State Bank Says Pakistan's Official GDP Under-estimated

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan



Mobile Money Revolution in Pakistan

Monday, February 9, 2015

India Fudging GDP to Show Faster Growth Than China's?

Indian government now claims that the country's GDP grew by 6.9% in 2013-14, well above the 4.7% growth the country had announced earlier.

Based on the latest methodology,  it is claimed that the Indian economy expanded 7.5 percent year-on-year during the last quarter, higher than 7.3 percent growth recorded by China in the latest quarter, making it the fastest growing major economy in the world, according to Reuters. Is it wishful thinking to make Indian economy look better than China's?

India GDP Revisions. Source: Financial Times


The GDP revisions have surprised most of the nation's economists and raised serious questions about the credibility of government figures released after rebasing the GDP calculations to year 2011-12 from 2004-5. So what is wrong with these figures? Let's try and answer the following questions:

1. How is it possible that the accelerated GDP growth in 2013-14 occurred while the Indian central bankers were significantly jacking up interest rates by several percentage points and cutting money supply in the Indian economy?

2. Why are the revisions at odds with other important indicators such as lower industrial production and trade and tax collection figures?  For the previous fiscal year, the government’s index of industrial production showed manufacturing activity slowing by 0.8%. Exports in December shrank 3.8% in dollar terms from a year earlier.

3. How can growth accelerate amid financial constraints depressing investment in India?  Indian companies are burdened with debt and banks are reluctant to lend.

4. Why has the total GDP for 2013-14 shrunk by about Rs. 100 billion in spite of upward revision in economic growth rate? Why is India's GDP at $1.8 trillion, well short of the oft-repeated $2 trillion mark?

Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example,  French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated.  Picketty writes as follows:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "


Related Links:

Haq's Musings

India-Pakistan Economic Comparison 2014

Challenging Haqqani's Op Ed: "Pakistan's Elusive Quest For Parity"

State Bank Says Pakistan's Official GDP Under-estimated

Pakistan's Growing Middle Class

Pakistan's GDP Grossly Under-estimated; Shares Highly Undervalued

Fast Moving Consumer Goods Sector in Pakistan

3G-4G Roll-out in Pakistan