NEW DELHI: The new government is likely to overhaul the entire statistical system of the country, which includes undertaking additional surveys, fixing data leakages, improving frequency of the survey releases, and tweaking the methodology of computing several macro-economic indicators, official sources told FE.
“The entire overhaul of the statistical system is the top priority of the government,” an official said, while adding that some of the decisions pertaining to the same are also part of the 100-day plan of the government. “The statistics ministry had earlier prepared a 100-day plan, but it’s being reviewed at the moment,” the person added.
One key proposal being considered is to minimise errors and discrepancies in the macro-economic indicators, which are released on a periodic basis. “The GDP (gross domestic product) and IIP (index of industrial data undergo significant revisions. We want to minimise that,” another official said. The statistics ministry is mulling on the changes that it should make in the extant data compilation and computation exercise for these two macro indicators.
Besides, the ministry is considering undertaking a quarterly Periodic Labour Force Survey (PLFS), an indicator for unemployment, for rural areas, an official said. Currently, rural unemployment is part of the Annual PLFS exercise; and only urban unemployment is reflected in the quarterly PLFS data. “We also wish to reduce the time taken to conduct the survey, and subsequently release the results,” said an official.
The delay in release of essential macro data and frequent revisions has a major impact on the policy making exercise of the government, say economists. The GDP data for instance is crucial for the Budget making process, as well as monetary policy decisions. A sharp revision, either upwards or downwards, may create a situation of error, and can dent the policy’s impact.
“Strengthening the statistical system to revamp GDP and employment data to increase the reliability is a very good move,” said Lekha Chakraborty, professor, National Institute of Public Finance and Policy (NIPFP). “Significant components of GDP are extrapolated due to outdated data,” she said. This is perhaps why discrepancy exists
Discrepancy is a component within the national income data. In the expenditure method, it’s that column which reflects the amount within GDP that has not been allocated to other components, such as investments or consumption. Notably, in FY24, due to its size, discrepancy added 4.2 percentage points to growth, which came in at 8.2%, say economists. The statistics ministry is aiming to reduce the quantum of discrepancy, and is holding consultations.
Meanwhile, FE had reported earlier that the National Sample Survey Office (NSSO) is likely to undertake many more surveys, on the request of other ministries. Earlier in FY24, several ministries including agriculture, commerce, labour, tourism and health had separately written to the statistics ministry for technical and manpower support for these additional statistical exercises.
The areas covered in the proposed surveys include tourism footfall surveys of different states, ailments among the elderly and price estimation of industrial inputs, an official had told FE earlier.
Source: The Economic Times
