India needs reliable data to track capital expenditure

We require a national survey to gauge capex that accurately reflects the investments being made

- PRAMIT BHATTACHARYA

In 2014, Narendra Modi rode to power promising to kick-start a new investment cycle and end an era of 'policy paralysis'.

Soon after becoming Prime Minister, he identified the revival of stalled projects as a key priority. But progress remained slow.

Quarter-after-quarter, data from the Centre for Monitoring Indian Economy (CMIE) showed that investment projects remained stalled. The promised revival of 'animal spirits' did not materialize.

In 2016, senior government officials asked CMIE to reclassify some projects it identified as 'stalled,' according to two people with direct knowledge of the matter.

CMIE's capex data did not reflect the new government's efforts to restart some of these projects, the officials argued.

Veteran journalist Sunil Jain wrote about the pressures being put on CMIE, and the pressures eased after that. But the official unease with the privately-managed capital expenditure-tracking database persisted.

A new capex survey being planned by the ministry of statistics and programme implementation (Mospi) may partly assuage such concerns.

But beyond the desire to shape economic narratives, there is a genuine need for policymakers and analysts to understand India's investment cycle better.

Almost every year, economic policymakers and analysts manage to sight "green shoots" of a private capex recovery. So far, they have been wrong.

Like a broken clock that gets it right twice a day, they will get lucky one day in the future. But without better data, they will routinely misjudge the capex cycle.