The quality of national statistics produced by the Central Statistics Organization and the National Sample Survey Organization has kicked up some dust. “We are handicapped by the reliability of some of the basic data that we need to use in policy calculations,” Reserve Bank of India governor D. Subbarao said on Tuesday.
Dodgy data is a handicap for decision makers. Consider the conflicting signals about the extent of the economic slowdown and especially the state of investment activity, two parameters that are key inputs for the central bank when it decides on interest rate policy. Or: The extent of poverty in India or new job creation in recent years has led to immense debates partly because the numbers put out by government statisticians are not fully trusted.
So, there is little doubt that the system to collect various social and economic data needs to be overhauled, something that has been discussed at least since January 2000, when the National Statistics Commission headed by C. Rangarajan was set up. Yet, it is a mistake to condemn the entire statistics machinery in a sweeping verdict. Let’s face it: India is not China.
A first step is to identify two sets of problems—knowledge and staffing—and then try to fix them.
Consider the knowledge problems. First, the data collection system at the state level is in a shambles. The 13th Finance Commission has already provided grants worth Rs616 crore, or Rs1 crore per district, to improve statistical systems at the state and district levels, especially the latter. Second, the indexes used to capture high-frequency data such as inflation and industrial production need to reflect the changing composition of consumption and production in a high-growth and fast-changing economy such as ours. Third, new initiatives will be needed to understand trends in subjective well-being and happiness among Indians as well as to build new measures of national progress such as green accounting (to capture environmental degradation and the depletion of non-renewable resources).
However, the most immediate problem to be solved is the immense shortage of staff. The minister for statistics and programme implementation, M.S. Gill, spoke last week about the talent crunch because of low salaries. Young statistics grads have skills that are in great demand from the financial sector, consumer firms and market research agencies. They are no longer interested in government jobs.
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