Statistically speaking

The Centre recently constituted a new internal oversight mechanism for official data, offering a makeover to a Standing Committee on Economic Statistics (SCES) constituted in 2019. This was done after findings from the last round of household surveys on consumption expenditure and employment were discarded over ‘data quality issues.’ Per the Statistics Ministry, the SCES was previously tasked only with examining economic indicators related to industrial and service sectors, along with labour force statistics. This limited its focus to reviewing high frequency data such as Index of Industrial Production (IIP) and the Consumer Price Index (CPI). Surveys as well as enumerations of the Periodic Labour Force Survey, Annual Survey of Industries, and the Economic Census fell within the domain of SCES.

Now, it will be replaced by the new Standing Committee on Statistics (SCoS) whose broader mandate involves reviewing the framework and results of all surveys conducted by the National Statistical Office. The change comes amid criticism of India’s statistical machinery by the PM’s Economic Advisory Council, which includes Chairperson Bibek Debroy. He called for a revamp of the system, affirming that the Indian Statistical Service had limited expertise in survey design. The Committee’s mandate is being expanded beyond economic data, and now encompasses advising the Ministry on technical aspects of all surveys. This includes the sampling frame, design, survey methodology as well as finalisation of results.

SCoS will also identify gaps in data, and strategies to plug them using official statistics. It has also been asked to consider the use of administrative statistics to improve data outcomes. This is pertinent as in the past few years, credibility of data provided by NSO has been called into question. The results of various household surveys traditionally carried out by the National Sample Survey Office (NSSO) have come under government’s scanner as the approach and outcomes of such studies are being probed.

In 2019, the Centre trashed the results of two major NSSO household surveys carried out in 2017-18, citing data quality issues. The surveys were aimed at assessing the employment and consumption expenditure levels in households. The real reason behind withholding the outcome of the surveys initiated in the aftermath of demonetisation and GST rollout was that the surveys revealed a measure of distress within households. After these surveys were discarded, a new Household Consumption Expenditure Survey (HCES) was initiated in July 2022. Finalising its results will take upwards of a year.

In the absence of this data, key economic indicators including retail inflation, GDP, the extent of poverty — metrics that are revised depending on changing consumption patterns, will be based on figures from 2011-12, which will have little to do with the current situation. Such shortcomings offer a glimpse into challenges involved in economic policymaking. Opting for wrong policies guided by unreliable past data is a sure-shot recipe for disaster.

Systemic anomalies plague India’s statistical prowess — like the lack of autonomy of the NSO, episodes involving the government controlling the narrative of data, conflict springing up between the Ministry of Statistics and Programme Implementation (MOSPI) and government agencies, as well as the quality and proficiency of statisticians at the central and state level. Financial and human resources are also left wanting. India needs a statistical reforms commission and a CAG-like mechanism to oversee it. And the statistics framework should work independent of political or outside influence.