RAISINA HILL
When did you last hear of the Collection of Statistics Act? Well, earlier this year, the Narendra Modi government decided to amend this law. The Union Cabinet approved the changes in February. By July, both the houses of Parliament passed the bill that was to amend the original law of 2008. And the amended law was gazetted in August 2017.
Few laws get passed so smoothly and in such a relatively short span of time. Yet, collecting statistics in India has not been all hunky-dory. The challenges of making data collection robust and comprehensive will once again be a topic of animated discussion later this week when the gross domestic product (GDP) numbers for July-September 2017 are released. The continuing complexities of the GDP data collection are indeed quite worrying, as it transpired during a meeting last week, organised by the International Council for Research on International Economic Relations.
While commendable progress has been made in GDP data coverage and collection, three areas of concern should continue to bother policy makers. With respect to government data, collection problems don’t exist for all practical purposes, particularly as far as the Central government and its departments are concerned. However, seamless data collection processes have been completed only for 21 state governments. Work on making data collection easy in three more states is on, leaving five states outside the purview of regular data collection. Hopefully, all 29 states will come under the ambit soon.
Collection of GDP data from the corporate sector saw a dramatic improvement when the new series was released with 2011-12 as the base year. The coverage of all companies registered on the online portal of the corporate affairs ministry became relatively easy, improving the comprehensiveness of such data as also strengthening their quality. Yet, there are gaps. For instance, data collection from enterprises has improved, but obtaining data from establishments continues to be poor.
Concerns over data collection from the household sector, which accounts for almost 45 per cent of the economy’s gross value added, are the most serious. Data for most categories are believed to be understated. Worse, access to data for a large number of trusts that run temples and even for a rich entity like the Board of Control for Cricket in India (BCCI) is severely limited. This significantly detracts from the efforts of the Central Statistics Office (CSO) to present more comprehensive and qualitatively superior data for measuring the pace of economic activity in the country.
A common weakness that bedevils GDP data collection from all the three broad categories is limited access to some of the relevant numbers. An important question, therefore, is whether the powers under the Collection of Statistics Act have been adequately used or enforced by the government. Remember that after the 2017 amendment to the law, all states including Jammu & Kashmir are now covered and the Union government is empowered to appoint nodal officers to facilitate collection of data from different entities and also determine these officers’ power and duties.
So, expect two likely developments in the space of data collection that should have a positive impact on the quality of India’s GDP numbers. The Union government is now going to lean more heavily on various ministries at the Centre and in states to deliver on their output data without the gaps. Even non-profit organisations and religious or non-religious trusts will now be pushed to report their numbers more regularly. Bodies such as BCCI should perhaps sit up and take note. Indeed, the amended law now allows the government to use the data collected for purposes other than statistical. In other words, wrong information furnished by entities can be proceeded against if that data do not tally with information the same entities may have provided to other agencies like the sector regulators, stock exchanges or the tax authorities.
GDP data quality improvement will be noticed for another reason from next year. With online filing of returns under the goods and services tax (GST) by about 10 million establishments, collection of GDP data from both trade and industry will certainly get better and easier. The coverage of such data will also get wider.
All that you will need now is a more active CSO that pushes entities both in the government and non-government sectors to deliver data correctly and regularly. This will at least remove the problem of access to data for measuring GDP. The methodology issues, however, will still need to be addressed.