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The GDP data based on 2011-12 base year does not reflect the momentum of economic activities across the spectrum and a more realistic methodology is required, says a Parliamentary panel.
The Parliamentary Standing Committee on Finance in its report on the Statistics Ministry tabled in Parliament today also pointed out that several experts have expressed the possibility of over estimation of GDP for 2016-17 in the wake of demonetisation.
"The new series of National Accounts with 2011-12 as the base year has raised more questions than answers. The GDP data does not seem to reflect the momentum of economic activities across the spectrum. It is, therefore, imperative that a more realistic computation method be adopted with a view to enhancing the credibility of official statistics," the panel said in its report.
The Central Statistics Office has in its second advance estimates of GDP released on February 28, 2017, pegged the economic growth rate at 7.1 per cent for this fiscal and 7 per cent for the October-December quarter.
The CSO had also estimated economic growth rate at 7.1 per cent in its first advance estimates for this fiscal released on January 6, 2017.
The Committee said it would also like to be apprised about the rationale/process/assumptions made and adopted by the CSO in their recent GDP advance estimates for 2016-17, which has been considered by independent experts as a possible over-estimation, particularly in the backdrop of notes ban.
The panel suggested the Statistics Ministry should examine the possibility of revising the National Accounts annually to pre-empt the kind of controversies and debates that are being generated right now and make dedicated efforts to strengthen the system besides regular data collection.
It also recommend enhanced allocations for the Ministry and asked it to improve performance by better utilisation by plugging the chronic gap in budget estimates and actual expenditure.
The panel also said the process of launching periodic labour force survey for generating quarterly and annual data on employment etc for rural and urban areas be operationalised in a time-bound manner indicating real-time data.
It noted with deep concern the perennial shortage of manpower in the Ministry. As on December 1, 2016 there are 861 vacancies in Subordinate Statistical Service.
In the absence of regular field staff as per requirement, the sample survey by National Sample Survey Organisation (NSSO) will have to be conducted through contractual staff, which may affect the quality of data, it pointed out.
The committee would also urge the government to deploy the infrastructure available with the Ministry for collecting regular and up-to-date data on vital parameters like unemployment, it said.
The panel observed that unlike in developed countries, where such data gets released every month, the NSSO conducts surveys on employment only once every five years.
The Committee said that it would thus like the NSSO to be tasked with this responsibility to collect employment data at shorter and regular intervals.
The also recommended that Sustainable Development Goals (SDGs) should be separately and distinctly reflected in the Union Budget and respective Demand for Grants of the Ministries/Departments and the targets dovetailed with individual programmes/schemes.