How The Newsminute started a bogey with Wrong Data

For more than a year, thenewsminute's article on “How the Southern States are ‘betrayed’ by Delhi” has been widely shared in the Social Media.  Not surprising, since it’s the question of disbursement of funds to states, an emotive issue for any nation, much less ours with some millions diversities by way of religion, caste, region, language to name a few. So, while dealing with such an emotive issue, any responsible media organization would have double checked its data before publishing.  But not TNM. TNM shockingly falsified the data to arrive at a provocative and inciting narrative of Central Govt. at Delhi cheating South States by distributing their taxes to North Indian States.  

Let’s see how TNM falsified the data to arrive at this deliberately erroneous conclusion. From the net proceeds of Central Taxes (Direct and Indirect taxes combined), the Finance Commission gives its recommendation of distribution to each State Govt. The Central Govt accepted the recommendation of increasing the vertical devolution of Central taxes from 32% to 42%. The horizontal devolution (allocation of share to each state from that 42%) is not arbitrary; it's formulated based on specific parameters.

Income Distance (Difference between the state’s per capita income and that of the state with the highest PCI) accounts for 50% of the weight, thus being the single most important criteria in the Horizontal devolution formula. Apart from the share of Central taxes that is being imparted to the state governments, the Central Govt also allocates Grants-In-Aid for local administration, centrally sponsored schemes, non-plan schemes etc.

Let's see where TNM has put out misleading data. Firstly, there is no official data for state-wise break-up of total Central Taxes paid to Central Govt.  Govt. of India has released only state-wise break up of “Direct Taxes” (Personal Income tax and Corporate Tax).

Within that erroneous data, TNM made one more bloomer. Of the total direct taxes of all states, Maharashtra and Delhi alone account for a lion’s share of 53%, contrary to what has been claimed in the article.  Even this lion’s share of Delhi and Maharashtra in the direct taxes to Central Govt. is due to the simple fact that most of Indian Corporates have their registered offices at Mumbai and Delhi.

But the comedy of errors reached its peak, when they used wrong data to depict how the funds are ‘returned’ to each state out of the central taxes paid by them. The table from where TNM has sourced its ‘data’ from is ‘decomposition’ of FFC transfers. Decomposition of FFC transfers means break-up of state wise share of central taxes and NOT ratio of allocation or the rhetoric like ‘How much Delhi gives back to states’.

And it’s not just a misnomer; they’ve manipulated the figures to suit ‘their brand of journalism’. Or one should assume that a not-so-unknown news portal has committed lexical error, academic error and arithmetic error (the figures were taken as a fraction of 10 but still reported as out of Re.1).

The article also showed ratio of Central transfers to GSDP, suggesting how ‘low’ the southern states get from the centre. Or in simple words using troll language of a silly brownie point argument of victim-hood. But there are many other state governments that get far less, because of higher GSDP since Income Distance weighs the highest criterion.

  

But the article showed only the Central Indian States and expressed contempt that population being a factor as an impediment for Southern states, ‘unaware’ of the fact that 1971 population accounts for 17.5% when southern states have a higher density of population than the national average.  

Rationalised disbursement to local governments and authorities in accordance with the economic conditions of the region is not something new to us or any other state or nation in the world. For instance, in the US, Mississippi gets much higher federal aid than Minnesota, Or in the Germany, poor Länders (States) get financial equalisation vis-a-vis the wealthier states via such a horizontal devolution formula.
The Central heartland states do lack in development. There are a score of factors for that - Including Freight Equalization Policy. Simply because Mumbai or Chennai or Bengaluru contribute to the state’s revenue doesn’t mean Beed or Dharmapuri or Gulbarga should be deprived of funds.

I’m not up for this kind of comparison or for self-loathing or victim-hood. I did point out their mistake in a few conversations on twitter.  And did TNM correct it? Duh. TNM’s crowning glory moment was when a Pakistan’s defence think-tank widely circulated their article and assisted in trending #Dravidanadu hashtag calling for separation of Southern States from India.

Instead of logically reflecting on correcting the regional imbalance in development, they chose to write a faulty piece, that can get them easy fame, even if it plants sectarianism. And the irony is most of the 'comrades' who preach against classist attitude, abused and slandered migrant workers from other states as ‘coolies’ quoting this article.

It is not rocket science to conclude TNM had deliberately falsified the data to incite people from southern states and we’re seeing it on every passing day, including milking the language debate, simply to suit their readership count. Is this in anyway, ethical journalism? Of course, the veil of ‘Freedom of Expression’ will forever be used to hide this deplorable standards. It is We, as responsible and vigil citizens, mustn’t fall prey to such media manipulations.