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(Photo: Reuters)
(Photo: Reuters)

How to restore credibility of Indian statistics

The Indian statistical system must be revamped to ensure coherence in macroeconomic data, says a study

The credibility of India’s statistical system, and especially the methodology used to estimate GDP growth, has come under intense scrutiny in recent years. While it will be important to directly address the issues in growth calculations, there is also a larger need to restore the credibility of the Indian statistical system, according to a new Economic Political and Weekly study by R.B. Barman, the former chairman of the National Statistical Commission.

Barman lays out several recommendations to both improve GDP calculations and boost the credibility of India’s statistics. For instance, he suggests mapping the Annual Survey of Industries (ASI) data, which was used in earlier GDP calculations, with the new corporate affairs ministry data (MCA-21) used in the current GDP calculations. This could fill in data gaps and better reconcile GDP and GSDP numbers with old estimates.

Barman also emphasizes the need for better price deflators in GDP calculations. Deflators are price indices used to adjust GDP for inflation. Currently, the income from the services sector, which accounts for around 60% of GDP, lacks the appropriate price index, says Barman.

More broadly, Barman suggests creating regular processes within the Central Statistical Organization (CSO) for systematically testing for data consistency. For instance, the difference between estimates on household consumption based on the National Sample Survey Organization (NSSO) surveys and the CSO data, which are large and widening over time, need to be addressed. In addition, he recommends the government develop a well-integrated and advanced information technology infrastructure for producing more insightful and comprehensive macroeconomic data. Finally, he concludes that the recent draft National Statistics Bill, if enacted, would improve the accountability and credibility of Indian statistics.

Also Read: Re-engineering for Credibility: Remedies for India’s Ailing Statistical System.

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