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Business News/ Opinion / Views/  India has a crucial role in setting international statistical standards

India has a crucial role in setting international statistical standards

We could use our new membership of the UN Statistical Commission to advocate a widening of the way that GDP is measured.

Photo: Mint

Last fortnight recorded a watershed moment for the statistical community in the country with our unanimous election to the United Nations Statistical Commission (UNSC) after a gap of two decades. The membership is for a term of four years, beginning from January 2024. There is also a possibility of India chairing the commission during this tenure. Why is UNSC membership and potential chairmanship so significant and how is it going to help India and the global south?

Last fortnight recorded a watershed moment for the statistical community in the country with our unanimous election to the United Nations Statistical Commission (UNSC) after a gap of two decades. The membership is for a term of four years, beginning from January 2024. There is also a possibility of India chairing the commission during this tenure. Why is UNSC membership and potential chairmanship so significant and how is it going to help India and the global south?

The UNSC, established in 1947, is the highest body of the global statistical system. It brings together the chief statisticians of member states from around the world. It is the highest decision making body for international statistical activities, responsible for setting statistical standards and the development of concepts and methods, including their implementation at the national and international level. India, as a UN member and signatory to statistical standards issued by the Commission from time to time on various thematic areas, adopts these to implement; and the statistics so developed play a critical role in our planning processes. They also enable comparability across countries through various indicators such as Gross Domestic Product (GDP), Gross Value Addition (GVA) and other measures that emerge from various statistical processes, like household survey data, employment-unemployment statistics, price statistics, health accounts, tourism accounts, environment accounts, etc.

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In the country’s long history of 76 years, we have had two of our prominent statisticians chairing the Commission. The first Indian to hold its chair was P.C. Mahalanobis (for its eighth and ninth sessions held in 1954 and 1956 respectively), followed by V.R Rao who chaired the 19th session in 1976. Mahalanobis made path-breaking contributions to the UNSC during its formative years. He created a sub-commission on statistical sampling, which paved the way for the application of sample surveys in various fields of official statistics. Rao strengthened the statistical organizations of many developing countries across several regions, especially for carrying out household sample surveys. He is also credited with having chaired the only ever session of the UNSC held outside a UN duty station. It was held in New Delhi, 1976, at the invitation of the Indian government.

Many important issues are to be deliberated at the Commission during India’s latest tenture as a member. One of the most important items on the agenda will be the finalization and implementation of the System of National Accounts (SNA) 2025. This refers to the framework adopted by UN member countries for the formulation of national accounts, on the basis of which we estimate our GDP, GVA and other macroeconomic aggregates.

The current estimates of National Income are based on SNA, 2008, with 2011-12 as base year. Emerging economies like India and developing countries across the global south are in a disadvantageous position on account of its non-measurement of certain economic activities, such as unpaid work by women. The women’s labour participation rate in India is just about 20%, compared to about 70% in the US, UK and other developed countries. Thus, a large contribution of women engaged in economic activities, such as family labour in agriculture and small shops and tea stalls, remains unaccounted for. This makes the size of our GDP appear smaller than it would otherwise be, and thus also our per-capita income. Therefore, there is a need to redefine it and develop methods to measure the value addition of unpaid work.

Similarly, with the internet almost ubiquitous and technology disruptions frequent, amid rapid digitalization in India and other countries, the basic structure of production, consumption and expenditure has changed since the SNA 2008 was developed and implemented. Does this mean that changes in production, consumption and expenditure patterns due to digitalization have merely resulted in a shift from physical to online transactions, or over and above have also given rise to new types of economic activities that are beyond the old SNA framework?

The answer is both. Take the case of firms that are dependent on digital intermediary platforms. Typically, this so-called ‘gig economy’ has independent service providers who source their work from these platforms, such as bicycle couriers, ghost kitchens and ride-hailing cab drivers. Currently, their value addition remains outside the system’s accounting ambit. Similarly, there are a few products and services which are beyond SNA 2008, like data, digital services provided by enterprises and those provided by communities.

During the last decade, our economy has grown significantly around these activities. To offer a sense of the quantum of this growth, based on existing methodology, developed countries’ growth of digital-economy industries is estimated at around 10-12%, while India’s is around 21%. India should play a key role in the forthcoming revision of the Commission’s SNA to bring about a consensus on including additional digital industries and products and enabling countries to clearly measure the contribution of digitalization.

Apart from the measurement of unpaid work and digitalization, there are other important issues relating to the measurement of our well-being, of the impact of climate change, and so on. If we could incorporate these economic activities into the revised SNA of 2025 and implement the same, then a $5 trillion economy with a $1 trillion digital economy will not be a distant aim.

India’s four-year membership tenure at the Commission comes at an opportune time. We should seize this opportunity to represent the global south in setting statistical standards and help with their implementation.

Ashish Kumar and Rama Kamaraju are, respectively, former director general, ministry of statistics and programme implementation, and former senior consultant, Niti Aayog

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