But How Do You Hide the Dead…

The idea for this piece came from a May 13 tweet by G Raghuram. In this tweet Raghuram talked about the Goodhart’s law in the context of the way Covid numbers are being reported.

In a 1975 article, the British economist Charles Goodhart had stated: “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” This came to be known as the Goodhart’s law. Of course, like many other laws in economics, the Goodhart’s law has also not been stated in simple English.

As Carl T Bergstrom and Jevin D West write in Calling Bullshit—The Art of Scepticism in a Data-Driven World: “While Goodhart’s original formulation is a bit opaque, anthropologist Marilyn Strathern rephrased it clearly and concisely: When a measure becomes a target, it ceases to be a good measure.”

As Bergstrom and West further explain: “If sufficient rewards are attached to some measure, people will find ways to increase their scores one way or another, and in doing so will undercut the value of the measure for assessing what it was originally designed to assess.”

Examples of this phenomenon can be seen across different facets of life. A business school I used to work for had started dozens of journals and magazines, without much quality control, to drive up its rankings and it briefly did succeed. This was because business school rankings gave some weightage to research carried out by the faculty of a business school and by having its own magazines and journals, it was easier to publish. This helped in driving up the ranking. 

Now what does the Goodhart’s law have to do with the covid pandemic? As the covid pandemic struck and spread, different measures have been used to get an idea of its strength (for the lack of a better term). These include daily increase in covid cases, the total number of tests carried out in a district and a state, the total number of covid deaths, etc.

As per Goodhart’s law, these different measures have become targets. And that has led to different state governments  trying to game these measures, in order to make themselves look good and tell the world at large that they have the covid pandemic under control.

Before I get into data and news reports, let me explain this through a very simple example. For a while, the daily increase in the number of covid cases in Nagpur in Maharashtra was much more than the increase in the entire state of Madhya Pradesh.

Anyone who knows Indian geography would know that Nagpur is right on the border that Maharashtra shares with Madhya Pradesh. It is not an island. People can move between the states. This anomaly wasn’t really explainable unless one looked at the Madhya Pradesh numbers from the lens of the Goodhart’s law.

One parameter that has been managed (or should I say fudged) by different states is the number of people dying of covid. The idea as I explained earlier is to tell the world at large that they have the situation under control. The trouble is that the governments may be able to manage the data, but they can’t always hide the dead bodies.

Crematoriums across the country have been working overtime. Public health expert Ashish Jha, offered a straightforward argument in a Twitter thread on May 9. As he wrote: “During [the] non-pandemic year 2019, about 27,000 Indians died on [a] typical day. Crematoriums handle that level of deaths every day. Additional 4,000 deaths won’t knock them off their feet. Crematoriums across the country [are] reporting 2-4X normal business.”

He further writes: “So best estimate [of] 55,000 to 80,000 people dying daily in India, If you assume baseline deaths of 25,000-30,000, Covid [is] likely causing additional 25,000 to 50,000 deaths daily, not 4,000.” As Anirban Mahapatra writes in Covid-19 – Separating Fact from Fiction: “During the pandemic many of these excess deaths are due to COVID-19.”

Many journalists and newspapers have found ways of going beyond the official numbers. Let’s take the case of Gujarat. The Divya Bhaskar newspaper has reported that the state has issued 1.23 lakh death certificates between March 1 and May 10 this year. It had issued around 58,000 death certificates during the same period last year. So, the number of deaths has more than doubled this year. As per Gujarat government’s data only 4,218 deaths happened due to covid during the period. This suggests massive underreporting. The Gujarat government has called this report inaccurate.

It would be unfair to suggest that this trend of underreporting covid deaths is prevalent only in Gujarat. An April 15 report on NDTV, during the early days of the second wave, said that for Lucknow, the “cumulative official covid death count released by the government in the last seven days is 124.” Nevertheless, as “per the records maintained by the city’s crematoriums, over 400 people who died because of the virus had been cremated,” during the period. The government explained away this difference by saying that those dying in neighbouring districts and states were also being cremated in the city.

A similar thing happened in Bhopal as well. Over a period of 13 days in April, the official covid death count stood at 41. Nevertheless, a survey carried out by The New York Times of the main covid-19 cremation and burial grounds in the city, revealed that more than 1,000 deaths had been handled under strict protocols. There was a similar newsreport on Kanpur as well.  

In fact, the Financial Times, collected news reports across seven districts and found that the number of covid victims who had been cremated are ten times larger than the official covid numbers in the same districts. (Click on the above link to look at the graph).

Of course, other than such news stories, there have been a spate of photographs and videos lately, showing bodies washing up and then later buried on the shores of the Ganga river, flowing through Uttar Pradesh and Bihar. A Dainik Bhaskar news report puts the number at more than 2,000 bodies, with Kanpur, Unnao, Ghazipur and Ballia being worst hit. (Those who can read Hindi, I suggest please read this report).  

Journalists have also been counting paid obituaries being published in newspapers, again suggesting a huge difference between the reported numbers and the actual state of things.

As Bhramar Mukherjee, an epidemiologist at the University of Michigan told the New York Times: “It’s a complete massacre of data… From all the modeling we’ve done, we believe the true number of deaths is two to five times what is being reported.”

As per the Institute for Health Metrics and Evaluation, which is based in Seattle, United States, the total covid deaths in India as of May 6, stood at 6.54 lakh, around three times the official figure.

There are several ways in which the undercounting happens. In Uttar Pradesh, in order to get admitted into a hospital, the patient required a reference letter from the Chief Medical Officer “who heads the Integrated Command and Control Centres set up by the government in all districts”. Due to this rule, patients were turned away from hospitals. And if such a patient died he or she wouldn’t be counted in the covid deaths.

A medical officer in Krishnagiri in Tamil Nadu told The Hindu: “We have been told orally in the meeting that only deaths within 10 days of admissions will be taken as covid-19 deaths.” MK Stalin, the new Tamil Nadu chief minister, has asked the state government officers not to fudge data.

The number of deaths also depends on how the counting is carried out. Take the case of West Bengal, where in May 2020, the “official’ coronavirus death toll… doubled in the five days since the state virtually shelved its Covid-19 death audit committee.”

Then there are cases where an individual dying of covid had not tested positive (hence, it was a case of a false negative). There are examples of such cases not being counted as well.

There are also cases of covid deaths being attributed to other health complications that individuals had when they got infected by the virus. These include diabetes, hypertension, cancer etc., which increase the risk of severe covid.  

A news report on BMJ.com published in July 2020, pointed out that in Vadodra “death audit committees attributed nearly 75% of deaths in covid-19 positive cases to other causes such as complications from diabetes or following organ transplants.”  All this is happening against the prevailing guidelines of the Indian Council of Medical Research.

People who die outside hospitals or on their way to one, aren’t counted in the covid deaths. Two thirds of registered deaths in India happen at home. In all around 86% of deaths in India are registered.

Even here there is a great deal of variation across states. In Bihar and Uttar Pradesh, only 34.6% and 60.8% of the deaths, respectively, are registered. As the disease spreads across rural Bihar and rural Uttar Pradesh, massive undercounting of both active covid cases and deaths, is happening.

The reluctance of politicians notwithstanding, the system itself is not geared up to count the dead, from covid or otherwise, in these states.

The biggest evidence of undercounting comes from the fact that the Prime Minister Narendra Modi recently said that the “states should be encouraged to report their numbers transparently without any pressure of high numbers showing adversely on their efforts”.

There are several reasons why the governments need to count the number of people dying because of covid, correctly.

First and foremost, people have a right to know what is happening in the country. It tells us clearly how the disease is progressing  and helps us prepare accordingly, mentally, physically and financially.

Second, as I have often said in the past, if we don’t recognise a problem how do we work towards solving and/or containing it. With regard to this, Bhupinder Singh Hooda, a former chief minister of Haryana, made an important point in a recent column in The Indian Express, where he said:

“The Union government is allocating oxygen on the basis of the severity of the second wave in the state. If the state government underreports the numbers or fudges the data, it will harm, rather than help, the state as it will get a lower allocation of oxygen and more deaths will follow.”

Third, counting covid death numbers as accurately as possible is important for the overall health security of the world. No herd immunity can be achieved if the disease keeps spreading across India.

Fourth, the correct data helps epidemiologists run their models properly and then make projections that should help policy.

It also needs to be said here that historically during a pandemic, data is not always accurately collected. As  Chinmay Tumbe writes in Age Of Pandemics (1817-1920):

“Death figures are collected on the basis of ‘registration’, which is a process that usually breaks down in a period of crisis, as observed by the health officials of those times. It leads to serious underestimation of the number of deaths, especially in poorer countries with weak data collection systems. In India, the Census of 1921 noted that due to ‘the complete breakdown of the reporting staff, the registration of vital statistics was in many cases suspended during the progress of the epidemic in 1918’.”

The mortality statistics of those who died in the pandemic that happened between 1918 and 1921, have been updated through various studies over the years.

Having said that, when it comes to data and data collection, things have improved by leaps and bounds over the last 100 years. Hence, even with the pandemic being on, data collection and management, needs to be carried out in a much better way.

Of course, all this is lost on a central government, which is primarily interested in narrative management. It is currently busy spreading the narrative that it had warned the states of a second wave.

But then it did nothing about it… Didn’t order enough vaccines… Didn’t make sure that there was enough stock of oxygen… Exported the vaccines being produced… Continued with the kumbh mela and the elections, both big super spreader events… And also told the world that India had managed to defeat covid.

In between all this we were also asked to bang utensils and eat dark chocolate. 

Modi needs Rahul

narendra_modi
Rahul Gandhi is back. Back from his 57 day foreign sojourn, during which, if Congress leaders are to be believed, he was thinking about how to revive the Congress party.
And now that he is back he has come out all guns blazing against the Narendra Modi government. The Gandhi family scion has blamed the Modi government for being very close to the corporates and not being worried about the farmers. In a speech in the Lok Sabha yesterday he accused the government of being a “
suit, boot ki sarkar.”
For the time that Rahul was not in the country, several leaders of the Bhartiya Janata Party(BJP) took potshots at his absence. Amit Shah, the president of the BJP, had recently said at the two day National Conclave of the party in Bangalore that: “Instead of raising non-issues and fictional issues, they[the Congress party] should find out where their leader is.”
After Rahul returned to India, Sambit Patra,
a BJP spokesperson said: “He (Rahul) is confused. He does not know what he wants to do with his life, whether he wants to continue in politics. He has to answer to the people.”
Such statements are a part of the broad strategy of BJP of talking about a Congress mukt Bharat (an India without the Congress party). “Congress Mukt Bharat is not merely a slogan, but the determination of the people of India,” Narendra Modi said in January 2014, when the campaigning for the 2014 Lok Sabha elections had started. Since then, many leaders of the Bhartiya Janata Party(BJP) have used this slogan on many occasions.
Nevertheless, a slightly strong Congress party might work to the advantage of the BJP. And a
Congress mukt Bharat may not necessarily be good for the party. Why do I say that? Take a look at what happened in the recent elections to the Delhi assembly.
The BJP got 32.2% of the votes polled. This was marginally lower than the 33.07% of the votes that the party had polled in the assembly elections held in December 2013. The Congress had polled 24.55% of the votes in December 2013. This collapsed to 9.7% in the recent elections. The gainer was the Aam Aadmi Party (AAP). The vote-share of the party jumped from 29.49% to 54.3%, helping the party win 67 out of the seventy seats in the assembly.
What this clearly tells us is that the entire collapse in the vote for the Congress moved to the AAP. This in a way ensured that the anti-BJP vote did not get divided and helped AAP win almost 100% of the seats in the assembly. If the Congress vote hadn’t collapsed as much as it did, it would clearly helped the BJP win more seats in the Delhi assembly. Hence, a stronger Congress would have helped the BJP in Delhi.
Now, along with this let’s look
at an interesting piece of analysis on the 2014 Lok Sabha elections carried out by Neelanjan Sircar, a Postdoctoral Research Fellow at CASI at the University of Pennsylvania. In his analysis Sircar found that: “Consider the constituencies in which the BJP and Congress were the top two vote getters; there were 189 such constituencies, and the BJP won 166 of them for a whopping strike rate of 88 percent. By contrast, the BJP’s strike rate was even (49 percent) in the remainder of the constituencies it contested.”
What this clearly tell us is that when it’s on a one on one with the Congress, the BJP does well. But the same cannot be said of a situation where there is a multi-party contest. In a multi-party contest, a strong Congress party can help in dividing the anti-BJP votes. While this may not matter in the bigger states like Rajasthan, Gujarat and Madhya Pradesh, and smaller ones like Chattisgarh and Himachal Pradesh, where there is a direct contest between the BJP and the Congress, it matters in many other states like Bihar, West Bengal, Tamil Nadu and Assam, where the electoral contest is multi-party.
In fact, in the first past the post system (an electoral system where the candidate winning the most votes wins, even though there might be more votes against him in total) that India has, a divided opposition can really help the ruling party. And for that divided opposition to become a reality, the Congress party needs to be on a slightly stronger wicket than it currently is.
This rule comes with a corollary. The BJP has to hope that the Congress does not come together with other opposition parties like it did in Bihar in August 2014, when bye-elections to 10 assembly seats were held. The vote percentage of the BJP plus the Lok Janshakti Party was at 37.9%. The vote percentage of Rashtriya Janata Dal plus Janata Dal (United) plus the Congress party came in at 45.6%. So, all said and done, the anti-Modi vote does remain strong. And it can create huge problems for the BJP.
But the other parties coming together is not a possibility in every state. Take the case of West Bengal where the Trinamool Congress and the Left Front are unlikely to come together for the assembly elections scheduled in 2016. A weak Congress party will mean that its votes will move to the Trinmool Congress and that can’t be good for the BJP.
The BJP cannot be expected to form the government in West Bengal. But in the 2014 assembly elections it got 17% of the votes polled. Given this, the party can expect to win more than a few seats in the state assembly.
Further, the assembly elections in Bihar are due later this year. It is important that the BJP does well in the state given that it elects 16 members to the Rajya Sabha. West Bengal also elects 16 members to the Rajya Sabha.
The BJP currently has only 47 members in the Rajya Sabha and hence can be held to ransom by the opposition parties in the upper house, whenever it wants to pass any important legislation. The Land Acquisition Bill is an excellent example of the same.
In order to increase the number of members in Rajya Sabha the party needs to do well in the state assembly elections scheduled over the next few years. And for that to happen, the BJP needs a stronger Congress party. In short, Modi needs Rahul.

The column originally appeared on The Daily Reckoning on April 21, 2015

Dear KC Chakrabarty, here’s the real reason why people invest in Ponzi shemes

KC-Chakrabarty
Vivek Kaul 
A standard explanation that seems to be emerging about why Ponzi schemes keep occurring in different parts of the country is that India does not have enough banks. And this lack of banks leads people to invest in fraudulent Ponzi schemes.
A Ponzi scheme is a fraudulent investment scheme in which the illusion of high returns is created by taking money being brought in by new investors and passing it on to old investors whose investments are falling due and need to be redeemed.
K C Chakrabarty, the deputy governor, is the latest individual who has jumped onto the more banks equals fewer Ponzi schemes, bandwagon. “The fact that people have to rely on such entities for their saving needs indicates a failure on the part of the formal financial system to reach out to such groups and earn their trust and confidence through a transparent and responsive customer service regime,” Chakrabarty said yesterday.
“The need of the hour is to ensure that our unbanked population gains access to formal sources of finance, their reliance on informal channels and on the shadow banking system subsides and, in the process, consumer exploitation is curbed,” he added.
So what Chakrabarty is effectively saying is that only if people had a bank in their neighbourhood they would have stayed away from a Ponzi scheme like Saradha. While it simple to come to this conclusion which sounds quite logical, the truth is not as simple as it is being made out to be.
Lets consider a few Ponzi schemes that have done the rounds lately. MMM India which promises to double the investment every month, needs prospective investors to have bank accounts. So here is a Ponzi scheme which is using what Chakrabarty calls the ‘formal financial system’ to flourish.
Before that there was the Speak Asia Ponzi scheme. In this scheme investors needed to fill online surveys. Anyone who has access to internet in India is most likely to have access to a bank account as well. So people who invested in Speak Asia, did so because they wanted to not because they had no banks in their locality.
Then there are Ponzi schemes which involve investments in gold coins. People who can buy gold coins won’t have access to a bank account?
Or lets take the case of Emu Ponzi schemes which had become fairly popular in parts of Tamil Nadu. The pioneer among these schemes was Susi Emu Farms. It promised a return of at least Rs 1.44 lakh within two years, after an initial investment of Rs 1.5 lakh had been made. This was the model followed by nearly 100 odd emu Ponzi schemes that popped up after the success of Susi.
Again anyone who has Rs 1.5 lakh to invest in a Ponzi scheme will not have access to a bank? That is rather difficult to believe. As Dhirendra Kumar of Value Research puts it in a recent column“Could it be that all those people who put money into Saradha wouldn’t have done so if they had a bank in their neighbourhood? Very unlikely. A lot of the deposits seem to have come from towns where there would have been banks. Moreover, almost every ponzi scheme that has come to light in the last few years has actually flourished in towns and cities. The investors who fell for StockGuru or the Emu farms or other schemes all had access to legitimate alternatives.”
So what is it that gets people to put their hard earned money into Ponzi schemes rather than deposit it into banks? The simple answer is ‘greed’. We all want high returns from the investments we make. And Ponzi schemes typically offer significantly higher rates of return than other investment options that are available at any point of time.
Having said that ‘higher returns’ are not the only reason that lures people into Ponzi schemes. There are other factors at work, which along with the lure of higher returns, ends up making a deadly cocktail.
Typically people do not like handing over money to someone they do not know. In small towns, people end up investing money into a Ponzi scheme through an agent they happen to know. So even though they have no clue about the company they are investing in, they feel they are doing the right thing because they know the agent.
In the case of Saradha, agents of Peerless General Finance and Investment were used to collect money. Peerless had a good reputation among the people of West Bengal, having been in the business of collecting small savings since 1932. This helped Saradha establish the trust that it needed to, during its initial days of operation.
As a report in The Indian Express points out “The selection of agents, a crucial link in the chain, was done very carefully by Saradha. Those picked were generally ones who wielded influence in their locality and in whom people had confidence.”
What also helps is the fact that agents are paid reasonably high commissions, leading to a higher level of motivation and thus better service. The agents typically come to homes of prospective investors to get them to invest money. So clearly there is better service on offer unlike a bank. There is very little need for documentation ( PAN No, Address proof etc not required) as well, unlike is the case with a bank.
Let us briefly go back to the more banks fewer Ponzi schemes argument. As the Indian Express report cited earlier states “One important reason for chit funds mushrooming(they are really not chit funds, but Ponzi schemes) in West Bengal is the absence of easy access to banks and other financial institutions. According to an estimate of the state Finance Department, of the 37,000 villages in the state, nearly 27,767 have no bank branch.”
While villages may not have access to a bank, they do have access to post offices. And India Post runs many small savings schemes, in which people can deposit money. But in West Bengal people seemed to have stayed away from these schemes. A report published in December 2012, in The Hindu Business Line quotes 
Gautam Deb, a former housing minister as saying “small savings and post office collections in West Bengal during the April-October 2012 period were merely Rs 194 crore, against the targeted amount of Rs 8,370 crore.”
So why did people stay away from the post office schemes and get into Ponzi schemes? For one the returns offered on Ponzi schemes were significantly higher. The second reason obviously is the significantly better level of service that Ponzi schemes offer with agents getting higher commissions.
In fact, there are no commissions on offer for selling post office savings schemes. As Kumar points out in his column “The post office offers excellent schemes with a huge reach in rural and semi-urban areas but can it compete on sales and marketing? In fact, when the government eliminated commissions on PPF and other deposits in post offices in 2011, it effectively eliminated whatever little sales muscle there was.”
The formal financial system thus finds it very difficult to compete with unscrupulous operators like Saradha. It is not easy for it to offer higher commissions as and when it wants to simply because it has got rules and regulations to follow. As Kumar puts it “They (i.e. the Ponzi schemes) spend much more on sales commissions, on offices, keeping politicians happy and getting media coverage because they can just dip into the deposited money for all these expenses. Therefore, even if legitimate financial services are available passively, they won’t be able to compete.”
Another reason why the people of West Bengal fell for Saradha was the fact that the Ponzi scheme came to be very closely associated with Trinamool Congress, the party that rules the state. The ‘formal financial system’ cannot afford to do anything like that.
When we take all these reasons into account it is safe to say that the more banks fewer Ponzi schemes argument doesn’t really work. Even if more banks are established, the banks will not be able to compete with the level of service and commissions that Ponzi schemes can offer. Hence, it is very important that unscrupulous operators who are caught running Ponzi schemes are punished and justice is delivered as soon as possible. This will ensure that anyone who wants to start a Ponzi scheme will think twice before he acts. And that is the best way to protect people from Ponzi schemes.
The article originally appeared on www.firstpost.com on May 3, 2013

(Vivek Kaul is a writer. He tweets @kaul_vivek)