Economic data will help policy
Release the consumption survey. And ramp up research
The Indian economy is set to contract this year. Economic policy must have two clear objectives. It must do all it can to ensure growth revival. And until that happens, the State must ensure that the poor are able to maintain at least basic standards of living. Achieving these goals requires detailed information about the economy. What were household incomes before the coronavirus pandemic? Were they enough to meet consumption needs? Were rich households more debtridden than their poor counterparts? Which parts of the country are likely to suffer from interruption of remittances due to reverse migration?
Unfortunately, there is very little recent, let alone realtime, data to answer these questions. The latest available consumption expenditure survey dates back to 2011-12. Data on assets and liabilities of households is from 2013. Even though the Periodic Labour Force Survey (PLFS) does quarterly employment- unemployment surveys, we only have data up to June 2019. Even the otherwise available high frequency indicators such as inflation and index of industrial production are being released with significant gaps and caveats now. With no credible official data about the economy, policymakers will be groping in the dark. This will also prevent an informed public debate. To be sure, there are some alternative data sources by private sector players. But they cannot be substitutes for official statistics due to two reasons. These databases are quite expensive. This significantly limits their access. They have not received as much academic scrutiny as their official counterparts, and, therefore, cannot be taken at face value.
The government needs to realise that ensuring publication of quality economic data is as important as monitoring health indicators during the pandemic. There are ways to do this. For example, the Reserve Bank of India could work with banks and payment companies to provide a geographical map of remittance flows before the pandemic. Phone companies should be asked to share information on SIM card movement patterns to give an estimate of reverse migration. Making Goods and Services Tax input credit chains public could give an insight into value chain linkages and potential interruptions due to the lockdown. But, to begin with, the government should release the National Sample Survey Office’s 2017-18
which it had hastily scrapped last year. This is literally a click away.