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Govt plans to get tough on corporate data

Govt plans to get tough on corporate data
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First Published: Thu, Sep 04 2008. 12 16 AM IST

Updated: Thu, Sep 04 2008. 12 16 AM IST
New Delhi: The government may soon arm itself with powers to search companies for data, with executives at companies that fail to submit required data—typically on production, price and capacity—in a timely manner potentially ending up in jail.
All this is part of India’s efforts to make its statistical indices more accurate and timely and the next session of Parliament, slated to begin on 17 October, is likely to see the introduction of a Bill which, if it becomes law, would give the government the power to extract such data physically, if need be.
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“We are hopeful that the Bill will be passed in the upcoming session of Parliament,” says Pronab Sen, chief statistician of India and secretary, ministry of statistics and programme implementation.
The proposed legislation, the Collection of Statistics Bill, 2007, was introduced in Rajya Sabha, or the Upper House of Parliament, last year and then sent to a parliamentary standing committee, a group of parliamentarians who discuss policies.
Industry lobby groups, such as the Confederation of Indian Industry (CII), have said they were worried about some provisions of the Bill.
Meanwhile, Sen says that some changes have been made to the Bill, making it tougher. “The penalty provision now includes imprisonment in case of default.”
The version of the Bill introduced last year only listed fines of between Rs1,000 and Rs10,000.
The Bill will replace the existing Collection of Statistics Act of 1953, and Sen says it will increase the data collection ability of the government. “This is an empowering legislation. At present, data collected for the Index of Industrial Production and the Wholesale Price Index are on a voluntary basis. The new legislation will allow various arms of the government to issue notices in the event of a default.”
The idea of a powerful data police appeals to economists, who have for long bemoaned the scarcity and unreliability of data available in the country and the constant need to revise numbers, including those on inflation as well as economic and industrial growth.
Abheek Barua, chief economist at HDFC Bank Ltd, says the quality of government data currently available is “abysmal”.
The private sector, Barua notes, has no incentive to share data. “Hence, there has to be some kind of penalty, which is reasonably strong”.
But some companies say they worry about sensitive business data ending up in the hands of their competitors via the government and also worry, though not publicly, that this could lead to better data sharing between government departments, such as those involved in collecting taxes.
“Collection of statistics is important for planning purposes and understanding the trends. However, in today’s world, data are very confidential…the powers sought under the Bill to enter premises and take possession are wide ranging. These things cause concern...,” says Harsh Pati Singhania, managing director of JK Paper Ltd, a paper product maker.
Even Barua says the government should “plug...any scope for a systemic leak (of data). The data so collected should also be used only for generating aggregate indices. Such data should not be used by regulators for harassing companies.”
One of the issues raised by CII, in a note submitted to the parliamentary standing committee attached to the ministry of statistics, had to do with the outsourcing of data collection by the government to other agencies without adequate safeguards, or the responsibilities of these agencies in the event of a misuse of data, or breach of confidentiality.
The standing committee has asked the ministry to prescribe general principles governing outsourcing the collection of data.
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First Published: Thu, Sep 04 2008. 12 16 AM IST