Currency confusion

Arvind Panagariya has an excellent piece in the Business Standard on how “tax terrorism” has created a poor investment atmosphere, and if not reversed quickly, might be the undoing of the “Make In India” campaign. While the piece itself is brilliant, my problem with it is that it mixes currencies and numbering systems without providing “translations”. Sample these two extracts:

In 2013, Nokia decided to exit mobile and smartphone manufacturing and sold its worldwide operations to Microsoft. Around the same time, the income tax department retrospectively assessed a sum of Rs 15,258 crore in tax liability against Nokia, India and placed a lien on its Chennai operations.


But in our zeal to immediately generate a large volume of revenues, we have compromised that prospect. Ironically, in doing so, we may not have added much to our revenue kitty either. Already, the tax authorities have lost a $3 billion tax claim against Shell in the Bombay High Court.

Now, $3 billion is approximately equal to Rs 18,000 Crores, which makes the size of Shell’s tax dispute to be of the same order of magnitude as Nokia’s. However, being presented in different currencies (the Nokia number is mentioned up to five significant digits, for no good reason), it makes it hard for the reader to compare the two numbers and appreciate their similarity!

Unrelated to this piece but another similar problem in reporting in Indian newspapers is the confusion of Indian and Western systems of representing large numbers. Some numbers are represented in lakhs and crores, and others in millions and billions, and while the two might be in the same “units”, it is still an effort on behalf of the reader to appreciate.

It would be a great idea for newspapers to put down as part of their editorial policies a note on expressing all numbers in a given piece in the same units and numbering systems (providing translations where said units or systems are not “native” to the data being presented). This will go a long way in helping readers appreciate the numbers.

Tailpiece: I read the first part of this piece assuming that it had been written by Arvind Subramanian (Chief Economic Adviser to MoF) and was quite surprised at the candour expressed by a member of the government. Evidently, I’m not the only person to have got confused between these two Arvinds.

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