BackA delayed economic census exposes a federal faultline
The statistics ministry should take state officials into confidence for major policy initiatives
PremiumIn the summer of 2019, a ‘technical report’ on a failed survey created an intense data storm in the country, exposing gaps in one of the key databases used in calculating India’s gross domestic product (GDP): the MCA-21 database of the ministry of corporate affairs. National Sample Survey (NSS) enumerators found that several firms listed in the database could not be traced, or were “mis-classified" (i.e. engaged in activities other than that reported in the database).
While the holes in the MCA-21 database received most attention, the report also exposed gaps in two other databases used by the surveyors: the 6th economic census (conducted in 2013-14) and state business registers (for 11 states that had been able to build one). Among the three databases, the share of casualties (firms that were not surveyed either because they could not be found or because they did not respond) was lowest for firms drawn from the economic census list. Nonetheless, the share of casualties even in the census list was quite significant (bit.ly/3CMiCgo). In response to these findings, the ministry of statistics and programme implementation (Mospi) promised remedial measures, including a revamped economic census. The 7th economic census was being rolled out at that stage, and Mospi claimed this would be an authentic geo-tagged database of all firms in the country. Mospi said it would create a ‘national statistical business register’ based on this database.
A reliable and dynamic business register is of utmost importance in fixing several large holes in India’s statistical system, as the previous Truth, Lies and Statistics column had pointed out. An economic census does not fulfil all requirements of a dynamic register, which requires regular updates. Still, a reliable census can provide vital inputs for such a register.
Unfortunately, the 7th economic census may not be able to meet such expectations. A senior statistician from a state that was banking on the census results to update its business register said that the data quality is too poor to be of any use. His state has not approved the provisional results of the census so far.
Other states have had a similar experience. Officials from the directorate of economics and statistics (DES) of three other states, governed by different dispensations, confirmed that the economic census results have not been published because of quality concerns.
Beyond data quality issues, a turf battle might be brewing. Till the 6th economic census, each state’s DES had a major role in the selection, training and supervision of enumerators. For the latest census, Mospi signed a memorandum of understanding with the information technology ministry to employ staff from Common Service Centres (CSC) spread across the country, reducing the role of state-level DES officials. Some state officials had objected, arguing that CSC staff lacked exposure to basic statistics. They feel vindicated now.
There are other reasons why state DES officials are piqued. In recent years, Mospi has left out state DES from major surveys such as the Periodic Labour Force Survey (PLFS) and the ongoing consumer expenditure survey. In past surveys, state directorates would collect data based on a matching sample.
There were two key motivations behind a dual-track sampling strategy. One was to cross-validate the central sample results. The other was to pool data from the dual surveys, creating a larger sample from which district-level estimates could be generated for each state. However, since most states failed to process the data in time, the state samples were hardly used either by the Centre or by states.
Mospi officials also had doubts about the rigour with which states conducted such surveys. Similar concerns—about timeliness and accuracy—led Mospi to outsource the work for the economic census. The ministry wanted to avoid a repeat of the experience during the previous economic census when several states failed to start the field-work in time, a person involved in planning the latest census said.
The complaints about state DES aren’t without basis. Statistical capacity constraints are far more severe in states than at the Centre. Most state governments haven’t invested much in building statistical capacity. Mospi has tried, albeit in a half-hearted way. For several years now, it has run a scheme to raise statistical capacity across states. The impact is yet to be felt. If the scheme had been effective, Mospi officials would not have felt the need to bypass state directorates in major statistical activities.
Compared to most other governance systems, India’s statistical system has always been better integrated vertically. The onus lies on Mospi officials to ensure that it remains that way. We don’t need another state-Centre battle-front in this country. Mospi needs to ensure that the concerns of state DES officials are heard in Delhi.
If the results of the 7th economic census are indeed unpalatable, Mospi should publish a report outlining reasons for the failed census, and identify remedial steps that it would take in the future.
The inordinate delay in releasing the results of the economic census has already raised eyebrows in the parliamentary standing committee on finance (which has oversight over Mospi). When this issue is raised again, Mospi officials should provide a detailed account of what went wrong.
India’s citizens and their elected representatives need to know the whole truth.
Pramit Bhattacharya is a Chennai-based journalist. His Twitter handle is pramit_b
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
