Mumbai: The 15th Finance Commission will reconcile data from several sources for its report as a matter of prudence, the commission’s chairman said on Thursday, amid a cloud over the credibility of India’s key economic statistics.
Mint reported on Tuesday citing a National Sample Survey Office (NSSO) report that India used a database riddled with holes to estimate its gross domestic product. The NSSO study, conducted in the 12 months ending June 2017, said that as much as 38% of companies in the MCA-21 database could not be traced or were wrongly classified.
Finance Commission members led by chairman N.K. Singh were in Mumbai to meet the Reserve Bank of India (RBI) governor, deputy governors and representatives of banks and financial institutions.
Singh said some members of his team will stay back in Mumbai to reconcile data provided by the Comptroller and Auditor General of India (CAG), the Reserve Bank of India, and the finance ministry and other sources.
“It would be within the bounds of acceptable and appropriate prudence to be able to do so," said Singh.
He said this data includes key financial variables of states’ expenditure and debt from CAG, data on central government’s debt and public sector borrowings.
“There are data from multiple sources that are available to the government and these should be on the same page as far as we are concerned. We may or may not succeed but we at least (would) come to a conclusion that this is what we believe is most credible," said Singh.
According to him, the commission would try to reconcile and come to conclusions on what to consider reliable data in the public domain and it has nothing to do with the methodology of computation. “But in terms of public domain itself, if there are multiple sources from where data has been collected, then we are seeking reconciliation on key data," added Singh.
He also said that the issue of the upcoming Bimal Jalan Committee report on the central bank’s economic capital framework (ECF) was not discussed at its meeting with RBI on Wednesday. “This was not discussed and should not have been discussed in depth by the Finance Commission and the RBI because this is entirely an in-house committee of the RBI. In passing, it was mentioned to us that the Bimal Jalan Committee report is in fairly advanced stage of deliberations and they would be submitting their report, perhaps, well in time for the Union budget of July this year," said Singh.
The committee, formed to review the existing ECF, has former RBI deputy governor Rakesh Mohan as its vice-chairman. Other members are RBI central board directors Bharat Doshi and Sudhir Mankad, deputy governor N.S. Vishwanathan and economic affairs secretary Subhash Chandra Garg.