
TCA Anant: The budget represents a missed opportunity to strengthen Indian statistics

Summary
- The Census will be delayed even further, it seems. The 2025-26 budget’s modest allocations for India’s pressing data requirements reveal an unsettling neglect of a vital aspect of governance.
The government has just presented the first full-year budget of its third term, marking a significant milestone in its economic agenda. This budget stands out for a deft tightrope walk, navigating the complex challenges posed by an uncertain global environment while ensuring that India’s growth remains strong. It addresses the pressing need to stimulate domestic consumption through targeted incentives and sectoral support while staying committed to fiscal prudence, which has been a hallmark of this government.
The budget introduces a range of forward-looking measures, including strategic investments in infrastructure, manufacturing and social welfare programmes. These have been largely welcomed by industry leaders, economists and social commentators who view them as a prudent mix of growth-oriented initiatives and financial discipline. The focus on long-term structural reforms, along with short-term relief measures, should reinforce confidence in India’s economic resilience.
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However, provisions for the Census and surveys by the ministry of home affairs as well as budget allocations for the ministry of statistics and programme implementation indicate that no new traditional statistical exercise is planned this year, further implying that the long-overdue 2021 Census is unlikely to be initiated any time soon. Also, the modest changes in allocations for the statistics ministry may be inadequate even for the proposed base revisions of the national accounts.
The continued delay in announcing a new Census is troubling. Lack of updated Census data compromises many programmes, both in the statistical sphere and the operation of social welfare schemes. In the latter case, state governments and local administrations are estimating target populations based on 2011 Census figures, often leading to complaints that deserving people are not getting included in schemes as the targets have already been met.
This may be a factor behind the apparent paradox of the government claiming that saturation coverage is being achieved while activist groups argue that there are still large groups left unattended.
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This reflects the budget’s curious relationship with issues of measurement. On one hand, there is a neglect of traditional statistical activity, while on the other, it laudably recognizes the importance of anchoring policy to measurable indicators with the announcement of an ‘Investment Friendliness Index of States.’
The announcement of this index suggests that an effort is being made to further improve Ease of Doing Business indicators. However, it is not clear whether the government has internalized the difficulties of linking such indicators to government policy.
While it is imperative that data be used to inform policy, there is also significant literature on the unintended, counter-intuitive or even self-defeating outcomes that can arise from mechanically applying metrics or statistical reasoning to public policy. Among the best known statistical paradoxes of this kind are laid out by the Goodhart’s Law and Campbell’s Law, both of which highlight the pitfalls of using metrics as targets.
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Goodhart’s Law warns that once a metric is used for decision-making or incentivization, people optimize their behaviour for it, often in ways that undermine its original intent. If schools are judged solely by test scores, for example, teaching may shift towards learning by rote rather than understanding.
A similar example lies in efforts to improve our Ease of Doing Business ranking. While state governments have made commendable efforts to improve the measured dimensions of what it costs to set up a business, several unmeasured dimensions have worsened. An opinion piece by columnist Andy Mukherjee (shorturl.at/dRurL) brought out a number of impediments to starting a business that are not adequately captured by Ease of Doing Business indices.
Similarly, Campbell’s Law states that “the more a quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more it will distort the processes it is intended to monitor." An example of this is the well-documented scandal relating to the World Bank’s Ease of Doing Business indicators.
What is particularly troubling is the fact that these paradoxes become even more possible in the absence of reliably updated conventional statistical data. For instance, since our targets and schemes are different in urban and rural areas, strategic manipulation aimed at getting benefits becomes possible; urban centres may continue to call themselves ‘rural,’ for example.
The policy imperatives identified by consecutive budgets and Economic Surveys make it clear that the government needs a significant expansion of conventional survey data. For instance, there is an urgent need to undertake a new Economic Census. Equally, we need to develop a survey analogous to the Annual Survey of Industries to cover the rapidly-growing services sector.
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While data gaps in analysing the services sector will be addressed in a later article, what is clear is that this budget represents a missed opportunity to strengthen India’s statistical capacity, which remains a vital dimension of governance.
The author is a former chief statistician of India and visiting professor at the Institute for Studies of Industrial Development.