National Statistical System : Long Overdue Step

Long Overdue Step The constitution of an 11-member National Statistical Commission under the chairmanship of C Rangarajan, governor of Andhra Pradesh, to critically examine the deficiencies of the present statistical system and recommend measures for a systematic revamping the system is a welcome step. The terms of reference of the commission, inter alia, require the panel to recommend a permanent and effective co-ordinating mechanism for integrated development of the decentralised statistical system, to suggest after review of the existing legislation for collection of statistical information, necessary amendments for achieving the objective of collection and dessemination of timely, reliable and adequate statistics and to examine the need to institute statistical audit of the range of services provided by the government and local bodies and make suitable recommendations. The importance of a sound database covering different aspects of the economy for policy formulation and impact evaluation is well accepted. This has become particularly urgent in the context of the ongoing liberalisation, globalisation and structural adjustment. Data are needed on investment, production, input intensities, technology levels, employment, wages, income, prices, human resource development, poverty, food security and gender concerns. Moreover, our commitment to the new UN System of National Accounts 1993 and the IMF Special Data Dessemination Standards (SDDS) have meant collection of considerable amount of additional data through quarterly surveys of enterprises and employment for putting out quarterly data on the GDP and employment in time. SNA 1993 calls for preparation of accounts for all the institutional sectors of the economy comprising non-financial corporations, financial corporations, general government, households and non-profit institutions serving households, besides enlargement of production and asset boundaries. The panel has a challenging task to examine the data gaps in the light of SNA (1993) and SDDS requirements and to make recommendations on suitable methodology for data collection, validation, estimation and analysis to enable the preparation of estimates of national income and other macroeconomic parameters in time. Even apart from the aforesaid, the scope for improving the quality, timeliness and coverage of data in respect of almost all economic sectors of the economy has been recognised. The statistical system as it has evolved till now is dispersed among different departments of the government of India as also state governments with the union department of statistics performing the nodal function of setting the concepts, norms, standards and methodology. Broadly, the major outputs of the system are the estimates of national and state accounts and related aggregates and field data on household levels and patterns of consumer expenditure, employment-unemployment, landholdings, debt and investment, unorganised manufacturing, trade and services, housing, literacy, etc. The quality of national accounts crucially depends on the timely availability of reliable data on a regular basis on the macro-components of national accounts, viz, sectoral outputs, inputs, savings, capital formation, etc. Several data problems have been identified in almost all sectors and all parameters which need to be attended to on priority basis. Some identified data gaps pertain to production data on crops other than principal crops and emerging agricultural activities like horticulture and floriculture. Differences between forecast and final estimates of crop production, data gaps in land use statistics, inadequacies in livestock statistics and non-availability of regular flow of information on inputs for agriculture, livestock, forestry and fishery sectors have been pointed out. Since the system of reporting of area under crops by the village level worker has not been satisfactory and effective, it has to be replaced urgently by more reliable mechanisms for collecting data on land use and crop area at taluk/block/ village level. The coverage, adequacy and accuracy of industrial statistics is yet another problem area. Basic data for computation of the index of industrial production requires large amount of estimation in respect of non-responding industrial units, as the scheme of regular submission of production returns by the units to the DGTD has been affected by its abolition and also with liberalisation of licensing procedures. Ways should be devised to ensure complete and correct reporting of production data and related information to the department of industrial development on a monthly basis. Then there is the large sized unregistered manufacturing sector where direct up to date data are not available as a result of which national income estimates are generated by extrapolating some bench market estimates of value added; but even here, data gaps are felt in regard to extrapolators. There are problems of inconsistency and validity of data thrown up by follow up surveys of enterprises of unorganised manufacturing units with the result that GDP estimates for this sector depend again on the trends in index of industrial production. Serious data gaps exist in regard to both benchmark estimates of value added and performance indicators for the growing service sector with the results of enterprise surveys being reportedly not reliable. With a substantial portion of the manufacturing sector being unorganised and diverse in terms of capital and labour intensity and production systems, the database requires to be firmed up to understand the responses to reforms and the diversification in investment, production patterns and sectoral disposition of gross value added. Interestingly, methodological issues are reported even in regard to estimates of private corporate sector, savings and investment.