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Politicking over the NSC report won’t help

A report commissioned by and submitted to the National Statistical Commission (NSC) calls for a thorough overhaul of India’s statistical system

editorials Updated: Aug 21, 2018 19:53 IST
Hindustan Times
A relatively short GDP series is adversely affecting the quality of both economic forecasting and research in the country(Getty Images/iStockphoto)

A report commissioned by and submitted to the National Statistical Commission (NSC) has given a back-series for India’s 2011-12 series GDP numbers. Although these are not official GDP figures, which are released by the Central Statistical Organisation, their association with the NSC has lent them greater sanctity than any unofficial study would have commanded.

The biggest news point of this series is that it shows India having breached the psychological double digit growth barrier during 2006-07. GDP at factor cost grew at 10.1% during this year. To be sure, the new back-series does not show any significant divergence from the earlier series. It is common knowledge that the pre-crisis period under the first United Progressive Alliance (UPA) government was among the best phases of economic boom that India has ever had.

This, however, has not stopped the Congress and the Bharatiya Janata Party (BJP) from indulging in some polemic on the economy and economic management under the two governments. Unfortunately, more important issues flagged by the report have been relegated to the background.

The first is regarding the methodological challenges in preparing a consistent back-series of the 2011-12 GDP numbers. Authors of the report have categorically said that non-availability of statistics from databases such as the MCA-21, which is compiled by the ministry of corporate affairs, means that the current methodology cannot be applied for the period before 2006-07. In fact, the report has used a different method to make its calculations. The authors have also cautioned that a relatively short GDP series is adversely affecting the quality of both economic forecasting and research in the country.

The back-series calculations are just one chapter of the report. The bigger mandate of the report is to give recommendations “for reform and strengthening of the Indian statistical system”. It has separate chapters which deal with data collection in agriculture, industry and services. Another important area the report deals with is regarding linking micro and macro level data for the economy. An example can underline the importance of such an initiative. India has seen multiple farmers’ protests in the last couple of years despite headline agricultural growth figures doing well. This is proof that we do not know enough about the degree to which these figures capture the well-being of individual farmers.

The short point is the report calls for a thorough overhaul of India’s statistical system. Given the transformation the Indian economy has undergone in the last two decades, the importance of this task cannot be over emphasised.

First Published: Aug 21, 2018 19:26 IST