'Manipulating statistics'

Dr Ashfaque H. Khan in his article "Manipulating statistics" has once again repeated his frivolous allegations on manipulation of statistics in the recent years particularly regarding LSM growth data and also correlated the import of petroleum group with economic activities, and has further pointed out "defects" in inflation data.
The writer while stating the manipulating of statistics in his article in recent years should have given the period that when the statistics started getting manipulated and before that all was well and there was nothing wrong with statistics.
Mr Khan's charges are absolutely unjustified and it appears that he has purposefully raised the issue only for criticising the present government. His views regarding manipulating statistics are somewhat surprising as he himself remained involved in computation and interpretation of key economic indicators. The author should be mindful that PBS is an autonomous body which contains a team of professionals which prepare the data of LSM and others including inflation in consultation with all the stakeholders and based on most reliable sources of data.
On Large Scale Manufacturing (LSM) for November 2014, the author has been selective in his effort to question the published data. He has intentionally twisted the facts, presenting selective data. In support of his argument that data is manipulated, he mentions only some of the items which showed high percentage growth during July-November, 2014-15. He conveniently ignores the actual numbers which point to the fact that the high growth in these items is due to a very low base in the same period in the previous year. Pig iron has a production of 20842 tones in November 2014 against 3900 in November 2013. Similarly the production of buses was 60 in November 2014 against 22 in November 2013, production of power looms was 70 in November 2014 against 28 in November 2013 and production of electric transformers was 2607 in November 2014 against 717 in November 2013. The same is the case with electric meters, soft drinks and woolen carpets. Moreover, the major groups of LSM like iron and steel products, automobiles, electronics, chemicals, leather products, coke and petroleum products, rubber products, non-metallic mineral products, pharmaceuticals, textiles, food, beverages and tobacco and engineering products have shown a positive growth, while only wood products, fertilisers and paper and board sectors showed negative growth as compared to last year.
The author then proceeds to pronounce his own growth rate of LSM according to his own calculation method, to which the PBS is not privy. However, to clarify, attention is invited to the PBS data available on the net where items with 89.6% of weight of LSM show a 3.21% growth impact in July-November 2014 against items with 10.4% weight showing -0.73 growth impact, giving a net growth is 2.48%.
In the same vein, it is clarified that in steel production there are 168 reporting units in INGOTS and BILLETS with weight 1.52 and 300 units in Steel Re-Rolling with weight 2.2841 in private sector. The Steel Mill in the public sector has a weight of 1.69. Similarly, in paper board, there are 53 reporting units instead of two as mentioned by the author. The production of steel mill has increased due to the fact that the Federal Government has supported the steel mill to resolve its financial problems. It is also important to note that Ministry of Industries and Production is having a dedicated statistics section headed by Chief Statistical Officer who is capable enough to handle all relevant data pertaining to LSM in a professional way.
As regards Sugar, it is worth mentioning that the sugar sector is regulated by the Provincial Cane Commissioners working under the Provincial Agriculture departments. Ministry of Industries & Production reports sugarcane and sugar production data as communicated by the Provincial Agriculture departments and Provincial Cane Commissioners. As reported by these Provincial departments, the production of sugar has declined by 80.97 percent in November, 2014 as compared to production in November, 2013 due to a decline in production and the Sugar mills in Sindh, started crushing late as they had filed a petition, in High Court of Sindh, against the sugarcane price fixed by the Provincial Agriculture department
With regards to writer's assertion that a decline in the imports of crude and petroleum products represents the sign of slowing economy is not correct. It may be noted that Pakistan is in deficit in four petroleum products ie Diesel (HSD), Furnace Oil, Mogas (Petrol) and Jet Fuel-1. Crude Oil used as a raw material for production of petroleum products is obtained through two sources: indigenous and imported. Production of indigenous crude oil in the country has increased during the second half of the year 2014 which has resulted in a little downward imports of crude oil.
The import of petroleum products witnessed a 5.6% rise in July-December, 2014 as compared to the corresponding period of 2013. On the other hand, imports of crude oil has shown a decline of 1.4% in July-December, 2014 as compared to the same period in 2013, one should also take into account the domestic production as well as existing stocks. The Oil Marketing Companies (OMCs) and Refineries have imported petroleum products and crude oil as per their requirements to meet the rising demand in the country.
According to the data of the Arabian Gulf Market, the average price of crude oil in the month of July 2014 was 106.5$ per barrel which declined to 61.8 $ per barrel in December, 2014- a decline of 43.1%. In December, 2014 crude oil price was $15.91/barrel less than in November, 2014. Secondly, the average price of crude oil stood at $111.29/bbl in July-December, 2013 but declined to $90/bbl- a decline of 17.6 percent. Thus the data reported in the article by the worthy writer does not match with the actual data available with Ministry of Petroleum and NR. Therefore the story is not based on facts on the ground.
On the inflation numbers, it is correct that PBS has never included the Fuel Price Adjustments in its calculation of inflation. Only the tariff notified by Ministry of Water and Power is taken into account as it includes all previous fuel price adjustments imposed up to the date of tariff determination.
As far as the house rent component of inflation is concerned; it is clarified that before 2007-08, house rent was indirectly computed on the basis of construction items input index. Since 2007-08, PBS started conducting quarterly rent surveys. This covers the general public in 40 cities and is not limited to government servants' house rent only. This arrangement is very responsive to the actual changes in the house rent levels in the economy. The Year on Year(Y-O-Y) house rent for the month of December, 2014 depicts a 7.62% increase; therefore author's point of view is again not correct.
Dr Ashfaque should have a positive outlook, and believe that things are moving in right direction as the international agencies are also acknowledging that economic activities, external position and fiscal performance continue to improve and reforms programs are on track.