The centre has once again set up a new committee to advice on government statistics.
Standing Committee on Statistics Chairperson Pronab Sen in conversation with Pallavi Nahata over the committee's scope, the changes it can make and the census.
Standing Committee on Statistics Chairperson Pronab Sen in conversation with Pallavi Nahata over the committee's scope, the changes it can make and the census.
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00:00 Welcome to BQ Prime. The government has formed a new standing committee on statistics to
00:05 advise on official data generated. Now, this committee is also being chaired by ex-chief
00:11 statistician of India Pranab Sen and will replace another committee headed by him that
00:17 was formed in 2019 to advise on economic data. Dr. Sen, thank you so much for taking time
00:23 out for us today.
00:24 It's a pleasure.
00:25 To begin with, just considering how wide and how loud the criticism around several government
00:37 data sets have been of late, I do want to ask you where you intend to start off. And
00:42 I completely understand that there's a committee that's been set up. It has multiple members.
00:48 You will meet and eventually put out a report. But I do want to ask you, where do you intend
00:53 to start? What do you think are the biggest challenges that the statistical system today
00:59 faces and what are you looking at first and foremost?
01:04 Well, I think the biggest challenge is that the demand for data is increasing at a rate
01:13 which outpaces the capacity of the system to generate it. And that's a problem. You
01:21 know, earlier the principal users of data were in government. But now the use of data
01:28 outside government is growing very rapidly with dimensions that the government never
01:36 considered at that time.
01:39 All right. So, you know, the census, for instance, is going to take a while, especially considering
01:47 its current status. Once work on the census does begin again and leading up to the point
01:53 where it's published, we're a very long way away from that. The same stands for multiple
01:58 other data sets as well. So, in the interim, what do you suggest?
02:03 Well, there aren't very many choices, you know, Pallavi. When we are talking about data,
02:11 which is either at the household level or at the firm level, there is no alternative
02:20 to having the census and the economic census both available to us. There is no option because,
02:29 you know, when we collect this data, it's usually done on the basis of a sample survey
02:34 and the sample has to be drawn in a manner which is representative of the entire country.
02:43 And the only basis on which we can draw such a sample is either the population census or
02:49 the economic census. And at the moment, we don't have recent editions of either.
02:55 All right. So, you know, considering the criticality of the census, and initially we understand
03:04 that there was a delay because of the pandemic. But ever since, we've heard very little, at
03:10 least from the government on progress about the census. So, I mean, should there, and
03:16 I also want to understand if that's something you're going to be looking at, in the sense,
03:20 you know, should not there be a law or something a little more effective to ensure that such
03:27 long delays, such long gaps between the census and even other kinds of surveys that are important
03:35 for decision making can be avoided?
03:37 Well, you know, as I said, there is a Census Act. The problem, of course, is that the Census
03:46 Act is administered by the Home Ministry. It is not done by the Ministry of Statistics.
03:52 Right. And it is entirely up to the Home Ministry to decide when to conduct the census. You
04:00 know, it has been a tradition to do it on the first year of a new decade. So, it should
04:07 have been done in 2001. It didn't happen. But it should be done as quickly as possible.
04:15 But you know, as I said, that in the absence of a census, all the surveys that we do, which
04:22 are particularly the household surveys, are going to be less accurate, because we are
04:29 we working with a population data, which is now 12 years old. And the population has changed
04:36 quite dramatically, both in its numbers and in the way it is distributed across the country.
04:43 So, is that something you're going to be looking at? I mean, why the census is under the Home
04:50 Ministry?
04:51 We can't be looking at it, Pallavi. You know, we will simply have to take it as given and
04:56 then try to figure out what would be the level of inaccuracy of our survey results.
05:04 All right. But one of the criticisms...
05:08 Sorry, sorry, please continue.
05:10 I said we cannot correct for the absence of the census.
05:13 Yeah, of course.
05:14 We can estimate how much the error could be.
05:18 Right. But also the fact that one of the criticisms, and I do not know how misplaced it is or it
05:25 isn't, has been the fact that the census is carried out by the Home Ministry. Some statisticians,
05:33 commentators on such issues have said that maybe the census also should be brought under
05:40 the Statistics Ministry or something more appropriate, instead of the Home Ministry
05:46 actually being in charge. So, I do want to know, is that also something that the committee
05:51 would want to look at and give recommendations on?
05:56 No, certainly not. There is a good reason why the census is under the Home Ministry.
06:02 You know, census is such a massive operation. And I don't know if you realize, the last
06:08 census, the 2011 census, involved two and a half million people going out into the field.
06:16 You know, the Ministry of Statistics does not have that kind of a reach. The Home Ministry,
06:21 on the other hand, does have that reach, which is why the census is housed there. They have
06:28 the authority to be able to commandeer government servants at various levels at the centre and
06:35 states to be able to conduct the census operation. MOSPI cannot do it.
06:42 Alright, got that. Also, on individual area of statistics, so employment, for instance,
06:48 is one. Are you satisfied? Of course, we have seen some progress on that, considering we
06:54 did not have even this data at this frequency earlier. But do you still think that there's
06:59 scope for like a quarterly government data release, which is published with, you know,
07:05 higher frequency?
07:06 Yes, I think there's scope for improvement there. I mean, there have been delays, and
07:13 the reasons for which I do not understand. But the data is collected on a regular basis.
07:20 But there seems to be some problem with the release of the data on a timely basis.
07:26 Alright, okay. And also moving to CPI again. So, the basis for the database, the CPI's
07:35 database also is extremely outdated. We were waiting for the household expenditure survey.
07:41 I believe in a recent interview, you did say that it's been conducted and for checking
07:45 robustness of data, you're waiting for another round to happen before the database for the
07:51 CPI can be reworked accordingly.
07:55 Yeah. So, well, let us first see what the data that we've already collected, which is
08:02 for the year 2022-23, what it looks like. It may well be the case that the data is good
08:09 enough to compute the CPI from that. But if we have any doubts, we will hold off until
08:17 the second survey is completed, which will be 2023-24.
08:23 Alright. So, even assuming it's the first option that actually plays out, we're still
08:29 a little while away from a new database for the CPI. Is that correct?
08:34 Yes, it will take a while because, you know, the data collection ended on June 30th. Now,
08:43 they're going to compile the data and by the time we start getting the initial results,
08:48 it will probably be November or thereabouts, November, December, somewhere around that
08:53 time.
08:56 Once that is done, the basket of goods and services that would go into CPI would be determined.
09:07 Once that basket is determined, then we would have to do a very detailed market survey to
09:15 be able to determine the exact definition of each good and service whose price would
09:21 be measured. So, for instance, that if the item, let us say the product is toothpaste,
09:31 you have to go down to a specific detail saying this brand toothpaste of so and so packet
09:39 size. So, it will be like something like Colgate 200 gram, something of that kind. You have
09:47 to go down to that degree of precision. And that can only be done with a detailed market
09:52 survey. Now, the market survey itself will take another four or five months. So, the
09:58 earliest you could probably expect the CPI would be late next year.
10:05 Got it. All right. Okay. And about the IIP, again, research from multiple economists seems
10:13 to suggest that there is a widening gap. And in fact, I do remember asking you this earlier.
10:19 You did say that the way the manufacturing GVA is computed is different from IIP and
10:26 hence the disconnect. But is that something as well that needs to be looked at? I mean,
10:31 keeping aside the reason, do you feel that there should be greater correlation between
10:38 the two?
10:39 Well, you see, the thing is IIP and the GVA measure two very different things, right?
10:50 The IIP measures the volume of production. Okay? It's a pure volume measure, such as
10:59 how many cars. What it doesn't measure is what is happening to the quality, nor does
11:08 it measure what is happening to productivity. The GVA picks up both those influences. So,
11:18 as far as the IIP is concerned, as I said, it's a volume measure. And a volume measure
11:24 is important. We need it because employment is usually linked with volumes of production.
11:32 But in terms of incomes generated, in terms of the GDP, the other factors such as productivity
11:39 and the quality of products also become very important. So, the two are meant for different
11:45 purposes and to get exact correlation between the two is not even expected.
11:52 In that case, do you think there is need for other surveys or maybe adding other components
11:57 to IIP? So, you know, just for instance, top of my head, considering the kind of volatility
12:03 we've seen in commodity prices, clearly IIP was only giving some part of the picture.
12:09 So, is there a need to kind of substantiate that with other data? If not,
12:15 Well, you know, the as I said, the IIP measures only volumes. Okay, number one. Number two,
12:23 the IIP measures only manufacturing. So, it's an index of industrial production. It's not
12:31 capturing services. It is not capturing agriculture. Those are captured by other data sets. Okay,
12:39 so the IIP is limited essentially to manufacturing. So, clearly, manufacturing is in fact a relatively
12:51 small component of our GDP. I mean, it accounts only a little over 20%. There are so many
12:59 other dimensions that have to be captured and they are captured but by other data sets.
13:04 Got it. Also, do you think there is need for other data sets apart from strengthening existing
13:13 ones? So, for instance, services like you just touched upon, we at least from the government,
13:20 we don't have any indicator to measure the strength of the services sector, especially
13:25 considering its increasing significance in the Indian economy. Likewise, in case of the
13:31 informal sector, and these issues have been touched upon earlier. So, is that something
13:38 that you want to be looking at as well?
13:40 No, we've already looked at it. So, there is already a proposal to have an annual survey
13:45 of services. And that will plug precisely the gap you are talking about. That's already
13:55 in the works.
13:57 Alright, okay. Any other new databases that we're going to be looking at? Like, you know,
14:03 at the start of this conversation, you mentioned that there's clearly an increasing amount
14:10 of interest in the Indian economy that's likely to sustain and the kind of data generated
14:17 so far is increasingly unable to keep pace.
14:21 Well, yes, you know, what is happening is that the frequency, if you think about government,
14:30 the biggest user of data in government used to be the Planning Commission. Now, the Planning
14:35 Commission was making a plan, which would be implemented two and a half, three years
14:40 later. So, it was no great hurry to get data. But when you're thinking of a corporate, they're
14:48 thinking about the next quarter. So, they need data with far higher frequency. And to
14:57 be able to generate the data with that kind of a frequency is both difficult and expensive.
15:04 So, we have to experiment with other kinds of data. But so far, the experiments that
15:10 have been done have not proven to be very fruitful, because most of that data set is
15:18 in the administrative data that's kept by, generated by various ministries in the government.
15:25 And since that data is used essentially for monitoring purposes, there is some question
15:33 about its accuracy.
15:35 Okay, got it. So, you know, again, another constant criticism in recent years, especially
15:45 has been regarding, you know, questions surrounding independence, non-interference from the government.
15:54 So as the head of a committee, how does one, how does the committee ensure that these are
16:01 not questions consistently raised on India's data systems?
16:06 Well, you know, this committee cannot do so. This committee is really a committee which
16:14 is, whose function is to assist the Ministry of Statistics to produce data of the right
16:25 quality and of the right type. The function of making sure that the data that is generated
16:35 by the system is not influenced by politics is that of the National Statistical Commission.
16:44 This committee is not supposed to take over the functions of the NSC.
16:49 All right, got it. So, thank you so much for taking time out for this. Always informative
16:58 to speak to you.
16:59 Pleasure, Kuldeep. Thank you.
17:00 Thank you.
17:01 Thank you.
17:01 Thank you.
17:02 [BLANK_AUDIO]