Business Standard

Can’t compare GDP data with consumer spend report: Panel

- SOMESH JHA

The findings of the National Statistica­l Office ( NSO)’S consumer expenditur­e report of 2017-18 can’t be compared with the consumptio­n data derived from gross domestic product (GDP), said a panel.

The committee, set up by the Union government to review the survey, gave explanatio­ns for a decline in expenditur­e witnessed across various food and non-food items, especially i n rural areas, which may find a place in the survey report of 2017-18, expected to be released within two months ( see chart).

Business Standard reported last month that consumer spending fell for the first time in over four decades — by 3.7 per cent — between 2011-12 and 2017-18, driven by a slackening rural demand, according to the NSO’S ‘Key Indicators of Household Consumptio­n Sur vey ’. However, following the news report, the government decided to junk the survey, citing data quality issues.

National Statistica­l Commission Chairman Bimal Kumar Roy told Business Standard in an i nterview published on Thursday that the report will be released in two months with “certain caveats” as there are genuine reasons for a fall in household expenditur­e.

A fall in household spending is a signal that poverty may have increased, according to experts.

The committee, set up on the directions of Chief Statistici­an Pravin Srivastava in July to review the validation of the survey data, said the ratio of the household consumptio­n expenditur­e and the private final consumptio­n expenditur­e (PFCE), a component of GDP, was “so much different for different item groups in both years 2011-12 and 2017-18 that nothing could be concluded” by comparing the two.

The NSO’S survey talks about spending, in terms of monetary value, by households on various food and non-food items.

Headed by NSC member G C Manna, the committee noted that the gap between the NSO consumptio­n expenditur­e data and the PFCE has widened between 2011-12 and 2017-18 “for almost all items”.

It obser ved t hat since 1993-94, this gap has consistent­ly widened, except for in 2011-12.

The panel said “it is not possible to arrive at a conclusion from the comparison” of administra­tive (GDP) and survey data as there was a “wide gap between production figures and the total household consumptio­n expenditur­e… It is difficult to study the consumptio­n of these commoditie­s in industries, hotels, restaurant­s, meat shops and export part of these commoditie­s, etc.”

The findings of the committee are not in tune with the government’s claim on data.

The statistics ministry, while announcing that it has junked the survey report of 2017-18, had said in a press release on November 15 that “there was a significan­t increase in the divergence in not only the levels in the consumptio­n pattern but also the direction of the change when compared to the other administra­tive data sources like the actual production of goods and services”.

The committee also ruled out a drop in reporting of consumptio­n data by the relatively affluent section of people compared to the previous rounds of survey.

It recommende­d steps for improving the future surveys, including ways to capture the affluent sections in a better way and checking the data on a concurrent basis while conducting the survey.

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