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Thursday, Dec 12, 2019

Reviving faith in India’s statistics

Transparency of data is essential both for good governance and the health of democracy

columns Updated: Nov 20, 2019 19:18 IST
Yamini Aiyar
Yamini Aiyar
It is time to give statutory status to the National Statistical Commission
It is time to give statutory status to the National Statistical Commission(Getty Images/iStockphoto)
         

“Where Mahalanobis and India led, the rest of the world followed.”

“The National Sample Survey Organisation (NSSO) is to be congratulated on its open data access policy.. allowing some of India’s best researchers, not only to participate in an informed and lively debate but also to feed back their experience in to the design of future surveys.”

These lines were written by Nobel laureate Angus Deaton and Valarie Kozel in 2005 in the introductory pages of The Great Indian Poverty Debate, an edited volume of essays debating the strengths and limitations of India’s poverty measures (an essential reading for students of poverty in India today). They serve as an important reminder of just how much India has lost with the government’s decision to withhold the release of the 75th round of the National Statistical Office (NSO, earlier the NSSO) Consumer Expenditure Survey (CES), 2017-18. Leaked findings, reported in the Business Standard, point to an unprecedented (and inconvenient for the government) 3.7% drop in average monthly consumption between 2011-12 and 2017-18.

Data quality issues, specifically, the widening gap between consumption data recorded in the CES and “other administrative data sources” is the government’s argument for rejecting the CES.

Indeed, this is not a new controversy. The divergence in average consumption growth measured from the then NSSO surveys and from the National Accounts Statistics (NAS) has been a matter of serious debate since the 1990s. In fact, this widening gap, changes in the NSSO survey design for measuring consumption, and resultant implications on the impact of the 1991 economic reforms on poverty served as the backdrop for the essays published in The Great Indian Poverty Debate. This was made possible because the government released data and encouraged discussion. In fact, many essays were first discussed at a workshop co-sponsored by the Planning Commission back in 2002, under the Atal Bihari Vajpayee-led National Democratic Alliance government. The workshop helped generate rich insights into the Indian statistical system and stimulated debate on reforms needed to strengthen the NSSO in a manner that was credible and objective.

Nearly 20 years later, if the gap is indeed widening, this ought to be a subject of even wider scholarly debate. Public access to CES data is thus even more critical today. By refusing to release data and limiting the discussion on data quality to a “committee of experts”, as indicated in the press statement, the government is doing a serious disservice to its own stated cause.

But it is also important to note two other facts. First, while there is much scope for improving NSO’s design and data collection, India’s administrative data and National Accounts too suffer from serious weaknesses, best highlighted in recent debates on GDP. Current concerns about increased divergence point to the urgent need for a systematic overhaul and modernisation of India’s entire statistical system, rather than selective questioning of data quality.

Second, contrary to claims of divergence, there is other government data, which point to convergence. The Periodic Labour Force Survey, for instance, shows a drop in employment for the same period. A drop in consumption would be entirely consistent with this data. Moreover, it is also consistent with other studies that point to the impact of demonetisation and Goods and Services Tax on the rural economy.

In the absence of CES data, it is hard to avoid the conclusion that the decision to withhold CES was based on political judgment rather than an objective assessment of data quality.

Beyond technical debates, it is this politicisation of India’s statistical system that should worry us the most. Of course the charge of politicisation is not new. Back in 2001, the Rangarajan committee recommended the creation of a permanent and statutory National Statistical Commission (NSC), accountable to Parliament in order to insulate the statistical system from government interference, and ensure public trust. Its primary role was to be the conscience keeper of the Indian statistical system. The NSC was set up but never given statutory status. Low budgets, staffing and lack of teeth constrained its functioning. In 2011, the Menon committee reiterated the importance of statutory status and recommended constitution of an empowered NSC with members selected jointly by government and the Opposition. Critiquing the relevance of an NSC as a foil to politicisation, economist TN Srinivsan made the argument that an NSC is unlikely to insulate the statistical system from what he rightly argued was a general governance problem. Laws can only do so much.

However, in the present circumstances, statutory status can serve as a signalling device and makes it harder to bypass the NSC, thus ensuring an independent voice. The now languishing National Statistics Bill ought to be debated on priority in the current winter session of Parliament.

Last, while the focus of the recent debates on India’s statistical system has been on the NSO and NAS, the quality and politicisation of administrative data on host of other indicators linked to scheme implementation is crying for debate. Getting states to “compete” based on rankings using administrative data is the hallmark of Narendra Modi’s governance style. Data is now part of everyday politics. The 15th finance commission may well introduce performance-based financing, which will link fiscal transfers to administrative data.

When the stakes are this high, political manipulation is almost inevitable. This can only be checked through robust public debate and scrutiny. Transparency of data and autonomy of the statistical system is necessary, not just for “good governance” but critical for the health of our democracy.

Yamini Aiyar is president and chief executive, Centre for Policy Research

The views expressed are personal