New Delhi: The government is working on improving India’s statistical system, enabling official data to be more comprehensive and credible in capturing various economic trends accurately, finance minister Nirmala Sitharaman told Mint in a post-budget interview.
“Data is something on which the government is working. We need to have a lot more comprehensive and credible data, and data that captures these kinds of changes (economic trends),” Sitharaman said, adding that the need for credible and comprehensive data can hardly be overstated.
“One improvement (has been) in the labour force surveys, which is coming out of the labour department. I think it is a vastly improved version, which gives you a fairly good picture of the labour (market),” she added.
However, the finance minister emphasized that while the formal labour sector has been successfully mapped, the informal economy is yet to be captured by official data.
“But again, that is only [for] formal sector labour, as we have not captured the informal sector as yet,” Sitharaman said.
Mint had on 23 January reported, citing sources, that the Prime Minister’s Office (PMO) had begun an important stock-taking exercise of India’s statistical system in the wake of several controversies related to official surveys and estimates.
Some of these controversies and concerns related to official data have been around the reliability of growth estimates, delays in conducting some economic surveys and the census, comprehensiveness of sampling methods, and the gap in the number of covid-19 deaths estimated by India and the World Health Organization (WHO).
Officials from the statistics and finance ministries, led by PMO officials, are a part of the stock-taking exercise of India’s statistical system. While some discussions on the issue have already taken place in the past months, the next meeting is scheduled shortly.
The Economic Advisory Council to the Prime Minister (EAC-PM), in a paper titled ‘The State of India’s Statistical System’, has drawn policymakers’ attention to the need for reforms in India’s statistical system, as the government seeks to bolster domestic and international confidence in official data.
Among the suggestions made by the paper were reviews to shorten the time lag for releasing final gross domestic product (GDP) figures for a given year, which currently takes as many as three years and multiple updates, and the need for making GDP deflators used in computing real GDP more comprehensive.
GDP deflator, a measure of inflation in the economy, is used to calculate GDP adjusted for inflation.
Key government officials will study concerns around the reliability of data, independence of the statistical system, and the autonomy of statistical institutions in the approval and publication of data, as the EAC-PM paper had sought the attention of policymakers on these issues, highlighting public debate around them.
While robust statistics are critical for measuring the effectiveness of policies and the country’s progress, the stock-taking exercise to better the country’s statistical systems will also boost trust in India’s statistical system.
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Published: 05 Feb 2024, 09:15 AM IST