Given how credible data is critical for taking any policy decision, and how India’s economic data has increasingly come under a cloud, it is just as well that the government is trying to fix things; by way of example, if the government had known that nominal GDP was going to grow at 7-8%, as it is now, it would never have guaranteed a 14% growth in GST revenues for states. It is in this context that the government has constituted a 28-member Standing Committee on Economic Statistics (SCES) headed by India’s first Chief Statistician, Pronab Sen, to review key data on the economy and work on developing survey methodology etc to ensure the data quality is top-class. To the government’s credit it hasn’t let Sen’s criticism of it – he was one of the 108 academics who signed a joint statement on political interference in India’s statistical system – affect its decision; indeed, the panel which is to include representatives from the UN, RBI, Niti Aayog, two industry chambers, and Tata Trust (it is not clear why they are a part of this panel) also has some other academics who signed the statement against the government.
Since the government has, at the same time, also put out a draft bill to establish the National Statistical Commission (NSC) as the nodal and autonomous body for all core statistical activities for the country – the current NSC was set up as an interim measure in June 2005 – it is not clear why the panel has been set up. After all, the NSC’s job is also defined as roughly the same, “to evolve, monitor and enforce statistical priorities and standards and to ensure statistical coordination”. Possibly, though this needs to be clarified at the earliest, the SCES will come up a methodology to collect data which the NSC – since it is a regulatory body – will evaluate and, within the NSC system, there is to be an Auditor whose job will be to, from time to time, evaluate the quality of the data.
What is problematic is the manner in which the NSC is to be set up. Anybody that deals with government organisations – to collect data or to authorize its release – needs to be an arm of the government with its head given a suitable government rank like a minister of state. The draft NSC Bill, however, doesn’t specify this, though it is possible the NSC Chairman will be suitably empowered since the Secretary to NSC is to hold the rank of a Secretary to the Government of India; but establishing the NSC as a corporate body will probably undermine its status within the government system. The Bill gives the central government the power to issue directions “in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality”; how do sovereignty and integrity, public order, decency etc come into the NSC’s functioning? It doesn’t help that the Bill goes on to add, “the Commission shall, as far as practicable, be given an opportunity to express its views before any direction is given”. Equally worrying is the sweeping power given in relation to statistics collected by private bodies. If the NSC feels this is in the public interest, “it may order for statistical audit” of the data and the private body “shall make available for inspection and examination, such records, plans, other documents and data, as may be necessary”. Apart from it not being clear why the NSC or any government body should have sweeping rights over the private sector, keep in mind the run-ins between the government and, for instance, CMIE on the latter’s capex database; this can now be extended to other private sector indices like, say, the PMI. None of this, sadly, is designed to increase the credibility of the official statistical system or establish its distance from the government.
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Source: Financial Express