Can't compare GDP data with consumer spending report, says govt panel

The findings of the National Statistical Office (NSO)’s consumer expenditure report of 2017-18 can’t be compared with the consumption data derived from gross domestic product (GDP), said a panel.

The committee, set up by the Union government to review the survey, gave explanations for a decline in expenditure witnessed across various food and non-food items, especially in rural areas, which may find a place in the survey report of 2017-18, expected to be released within two months (see chart).

Business Standard reported last month that consumer spending fell for the first time in over four decades — by 3.7 per cent — between 2011-12 and 2017-18, driven by a slackening rural demand, according to the NSO’s ‘Key Indicators of Household Consumption Survey’. However, following the news report, the government decided to junk the survey, citing data quality issues.

National Statistical Commission Chairman Bimal Kumar Roy told Business Standard in an interview published on Thursday that the report will be released in two months with “certain caveats” as there are genuine reasons for a fall in household expenditure. 

A fall in household spending is a signal that poverty may have increased, according to experts.

The committee, set up on the directions of Chief Statistician Pravin Srivastava in July to review the validation of the survey data, said the ratio of the household consumption expenditure and the private final consumption expenditure (PFCE), a component of GDP, was “so much different for different item groups in both years 2011-12 and 2017-18 that nothing could be concluded” by comparing the two.

The NSO’s survey talks about spending, in terms of monetary value, by households on various food and non-food items. Headed by NSC member G C Manna, the committee noted that the gap between the NSO consumption expenditure data and the PFCE has widened between 2011-12 and 2017-18 “for almost all items”. 

It observed that since 1993-94, this gap has consistently widened, except for in 2011-12.

The panel said “it is not possible to arrive at a conclusion from the comparison” of administrative (GDP) and survey data as there was a “wide gap between production figures and the total household consumption expenditure… It is difficult to study the consumption of these commodities in industries, hotels, restaurants, meat shops and export part of these commodities, etc.”

The findings of the committee are not in tune with the government’s claim on data. 

The statistics ministry, while announcing that it has junked the survey report of 2017-18, had said in a press release on November 15 that “there was a significant increase in the divergence in not only the levels in the consumption pattern but also the direction of the change when compared to the other administrative data sources like the actual production of goods and services”.

The committee also ruled out a drop in reporting of consumption data by the relatively affluent section of people compared to the previous rounds of survey. It recommended steps for improving the future surveys, including ways to capture the affluent sections in a better way and checking the data on a concurrent basis while conducting the survey.