NSO's Consumer Expenditure Survey

Scrapping of Consumer Expenditure Survey

Consumer Expenditure Survey(CES) conducted by NSO, Ministry of Statistics and Programme Implementation(MOSPI) is one of the oldest and reliable surveys conducted at quinquennial intervals for estimating household Monthly Per Capita Consumer Expenditure (MPCE). The CES is not only source of information on consumption spending and inequality, but also used extensively in other statistical processes including revision of base years for GDP estimation and deciding weight of various items in the CPI basket.

The Ministry is making headlines again; this time, over National Statistical Office’s (NSO’s) decision of scrapping 75^th round ( July2017- June2018) of consumer expenditure survey over “data quality” issues. A leaked finding from the survey report stated that average amount spent by an Indian in a month fell 3.7% to Rs 1,446 in 2017-18 from Rs. 1,501 in 2011-12; while consumer spending declined 8.8% in 2017-18 in India’s villages.

The Ministry has said that “report has been withheld due to its adverse findings related to decrease in consumer expenditure and divergence in the consumption pattern when compared to other administrative data sources”. However, rejecting the report on this ground is quite perplexing since everyone is aware that statistical calculations and subsequent results are always influenced by underreporting, non-response, sampling, specification and measurement errors. Economists also agree to the fact that data collection to arrive at the Monthly Per Capita Consumer Expenditure (MPCE) on all food and non-food items including social services is not an easy task. Further, calculation methodologies, conceptual limitations and comparability issues with other national accounts data are also not something that has not been observed or heard before.

Before releasing any report, rigorous procedure for vetting of data is followed where fieldwork, data checking, processing and analysing are done by experienced professionals under guidance and consultancy of experts. If there were data quality concerns in CES, why they were not reported and addressed in earlier stages. Even assuming severe discrepancies in the data findings, the right course would have been to publish the report while acknowledging its limitations and then leaving it on the economists to research, analyse and debate its insufficiencies to make further suggestions.

It has happened earlier also where Consumer expenditure survey which is generally conducted with a gap of five years was again repeated in 2011-12(68^thround), with government getting uncomfortable with findings of previous round of survey done in 2009-10(66^th round), as year 2009-10 coincided with the worst drought in 40 years and a global economic crisis. Although in 2011-12, CES data was revised by conducting another round of fresh survey, but still old survey results were not suppressed as government released findings of both 2009-10 and 2011-12 survey reports in public. But this time government has gone a step further by deciding not to release the results of the 75th round of NSS.

It is quite possible that 75^th round of CES data inconsistencies with national statistics could have been due to post effects of demonetisation announced in November 2016 and GST introduction in July, 2017. Nonetheless, suppressing CES results, lends further credence to the view that incumbent government is becoming more and more untrustworthy with its clear discomfort to share data projections which expose its policy failures.

In the past also, similar actions have been made when ahead of the general elections, the NDA government suppressed findings of the periodic labour force survey (PLFS) in early, 2019. Even, two members of the National Statistical Commission (NSC) including the acting chairman also resigned in protest suggesting that employment report wasn’t being released despite its approval.  In addition, overestimation of the GDP growth data by using new and different calculation methods is already a bone of contention.

Indian data collection and estimation techniques have always been acclaimed worldwide by economists as well as international agencies. However, junking the reports without proper audits is another shock to the independence of the Indian statistical system. Once credible statistical institutions are now moving away from objectivity. It’s important to safeguard the autonomy of such institutions to have a better understanding of the grassroots problems faced by the economy and for policy formulation that trickles down to the lowest strata of the population. Unless statistical institutions are insulated from political interference, the bureaucrats will keep on interfering with statistics to further erode their credibility.

Views expressed are personal...