The government has launched a major review of the existing system of macroeconomic data collection and computation methodology. The move comes amid criticism from several quarters, including leading statisticians, economists and global agencies, about India’s economic data, including the national income accounts.
As per a gazette notification dated June 27, a new 26-member advisory committee on national accounts statistics will not just undertake the customary base-year revisions for different sets of data, but would also advise the government on the “methodology for compilation and presentation of the National Accounts Statistics (Gross Domestic Product)”.
It would also review the existing databases and “explore the inclusion of new data sources for improving the estimates of national accounts”.
The larger mandate for the panel is significant, given the high volatility in certain sets of data like those captured under the index of industrial production, and the high-magnitude revisions of the GDP data in recent years.
However, the notification did not signal any urgency for the data revamp, with the panel, headed by Biswanath Goldar, former professor at Institute of Economic Growth, being given a five-year tenure or till the completion of next base year revision of National Accounts, whichever is later. “For operational feasibility, the committee may constitute sub-committees on different aspects with a maximum tenure of two years.”
The current GDP series launched in 2015 had come under a cloud, as several experts pointed out a significant chink of the companies in the MCA-21 database used for national income estimates could not be traced.
Many have cited the inadequacy of the expenditure-side data sources for GDP, and called for improving and widening the data collection sources.
In recent quarters, incongruities were found between robust headline GDP/gross value added (GVA) numbers and the estimates of relatively tepid private consumption expenditure, and also between the implied inflation numbers in national income accounts and the actual inflation measured by separate indexes.
FE had earlier reported that the government is likely to take the decision of base-year change of key macro indicators—such as the CPI, WPI, IIP and GDP—by the end of 2024. For the Consumer Price Index, the the base year is set to be updated to 2024 from 2012 at present, and that of GDP, IIP and WPI to 2022-23 from 2011-12 at present. The new base years are likely to come into effect from 2026.
In April, NSC chairman Rajeeva Laxman Karandikar had told FE that the data collection methodology of the National Sample Survey Office (NSSO) needs to improve, as the extant process is dated. “NSSO must recognise that in current times, several sources of data are available and they must change their functioning to use the same,” he had said.
At the ‘18th Statistics Day’ event on Saturday, Karandikar said the government should bring all stakeholders like NITI Aayog, statistics ministry, and data users (other ministries) together to improve data collection and dissemination. He called for coordination among different data collection agencies, but lauded the statistics ministry on efforts to incorporate information technology (IT) in the survey process.
Statistics secretary Saurabh Garg, at the same event, mentioned that government surveys have been increasing in number and diversity. “On a regular basis, we are looking at systemic improvements on timely publication of data or deployment of IT tools,” he said.
The government is actively considering releasing the Periodic Labour Force Survey (PLFS) for urban areas on a monthly basis, and for rural areas on quarterly basis as it aims to make the data more frequently available to policymakers.
Currently the statistics ministry releases the urban PLFS data on a quarterly basis, and rural one on an annual basis. The National Sample Survey Office (NSSO), the survey arm of the ministry, is working on “predominantly using” technology to conduct the PLFS, which it feels would be crucial in enhancing its frequency.
The advisory commiittee include officials of the statistics ministry, commerce ministry, Reserve Bank of India, finance ministry, agriculture ministry, and states’ statistical officials.