Has Indian statistics lost its power?

Amid criticism of growing political interference in national statistics, the constitution of a Standing Committee on Statistics (SCES) indicates an acknowledgement on the part of the government that there is a credibility problem with official data, which needs to be addressed. In addition, the draft National Statistical Commission (NSC) Bill 2019, aimed at providing statutory backing to it would ensure an empowered and insightful NSC to correct anomalies in official statistics.

In the wake of the increasing controversies over the data quality issues, it seems that ability of the official statistics to represent Indian economy is declining. The case of National Statistical Office’s (NSO’s) decision of scrapping 75th round (July2017- June2018) of consumer expenditure survey (CES) over “data quality” issues is well known among all. The leaked finding from the survey stated that average amount spent by an Indian in a month fell 3.7%; while rural consumer spending declined 8.8% in 2017-18. However, the ministry in its attempt to hide its policy failures decided to not to release the report and stated 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”. 

MOSPI made the headlines in early 2019 also in its attempt to suppress findings of periodic labour force survey (PLFS) when National Sample Survey Office’s (NSSO) annual job survey report for 2017-18 (July 2017-June 2018) which had shown a spike in the unemployment rate to 6.1 per cent, a 45-year high, was not released by the government, which termed it as a “draft” report. Non release of the survey was supported by a government statement that “the survey has used a new design methodology and their results are incomparable with previous data”.

In addition, issue related to overestimation of the GDP growth and release of new GDP series by “linking of back series of growth numbers with new 2011-12 base period”, is already a bone of contention among economists. Former chief economic advisor Arvind Subramanian in his research paper published in June 2019 clearly indicated “an overestimation of growth” by approximately 2.5% between 2011-12 and 2016-17. According to the paper, published at Harvard University, instead of the reported growth of 6.9% between 2011 and 2016, actual growth was more likely between 3.5% and 5.5%. Further, another case of criticism was observed with government’s sharp revision in GDP growth rate for the year 2016-17, the year of demonetisation, from 7.1% to 8.2%.

Accuracy of data, including its generation and dissemination is a must for precise policy formulation that trickles down to the lowest strata of the population. However, suppression of CES results and non-release of the employment data in the past without proper audits 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. Unless statistical institutions are insulated from political interference, the bureaucrats will keep on interfering with statistics to further erode their credibility.

In this regard, government has done a good job by constituting a new 28 member Standing Committee on Statistics (SCES) chaired by former chief statistician Proneb Sen. More importantly, the panel has other prominent economists such as CP Chandrasekhar, Professor, Jawaharlal Nehru University; Hema Swaminathan, Professor, IIM Bangalore, and Jeemol Unni, Professor, Ahmedabad University — who have been vocal about apparent “political interference” in the official statistical machinery. They were also signatories to the “March joint statement” of 108 economists and social scientists who raised concerns against the alleged “suppression of statistics”. Given the fact that different macro surveys use different data sources and calculation methodologies, the broad mandate of the committee is to take stock of all economic statistics to maintain consistency between various data sets and to avoid any divergence in national statistics.

Facing criticism over the quality of official data, the government has decided to review the role of the National Statistical Commission (set up on recommendation of the Rangarajan Commission in June 2005), and empower it through a proper institutional and legislative framework to give it more teeth and resources. In this regard, the draft NSC Bill 2019, tabled by Centre for providing a “statutory” status to it, is a step in the right direction. The draft bill proposes to establish NSC as the nodal and autonomous body for all “core statistical activities” to evolve, monitor and enforce “statistical standards” to ensure statistical coordination. To strengthen the autonomy of the commission, the bill provides for establishing a National Statistical Audit and assessment Organisation within NSC. It also proposes setting up of an independent secretariat for the Commission and envisages financial autonomy for the Commission through an independent National Statistical Fund. Going forward, this revamped NSC would surely work towards restoration of “institutional independence” and reinforce credibility of the official data.