FinMin seeks early GDP estimates, MoSPI says no

Latter to share data informally, but will release advance estimates after Budget

The finance ministry, which is gearing up to advance the Budget presentation date by a month, has asked the Ministry of Statistics and Programme Implementation (MoSPI) to release the advance estimates of gross domestic product (GDP) for 2016-17 in the first week of January.

However, MoSPI officials are learnt to have told their finance ministry counterparts that they can share some data informally, but the advance estimates will only be released in early-February as usual.

This could lead to a situation where crucial data is released after the Budget.

It is on the basis of advance estimates that the Budget assumes GDP for the next financial year and calculates various ratios, including fiscal deficit.

Subject to approval by the Union Cabinet, the Budget will be overhauled completely from 2017-18 onwards. Rail and Union Budgets will be merged, the date will be advanced to late January or early February, in order for Parliament to pass the Finance Bill before April 1, Plan and non-Plan expenditure classifications will be removed, and the process will move to outcome-based budgeting instead of an input-based one.

Senior finance ministry officials said that advancing the Budget date to end-January or early-February would not be an issue as far as data available to policymakers was concerned. They said by December, they would have a clearer picture of the macroeconomic situation for the April-November period as well as all information regarding the monsoon.

"That should be enough for MoSPI to come up with 2016-17 GDP advance estimates in early-January to help us prepare the Budget. The matter has been discussed with MoSPI," said an official, aware of the deliberations.

However, MoSPI sources told Business Standard bringing forward estimates is not tenable. "There is a request to advance it, but we cannot alter our calendar. Yet, we will have to meet the finance ministry's requirement for the Budget exercise," said a MoSPI official.

The official said, based on the data-set available till January, MoSPI would do some exercise and share it with the Budget-makers. This will be informal sharing of data, but advance estimates will be released on February 7, according to schedule, the official added.

"It (finance ministry) wants data by January 10 or 15. By then, we'll only have about two quarters of GDP data. We are yet to work out a methodology for that. We'll have to make a few assumptions and explore other data sets," said the official.

Early sharing of data will lead to divergence from actual data, but it will be ensured the difference is not vast, the official added.

"If early Budget is going to be a permanent affair, then we will have to work towards permanently bringing forward our advance GDP release. Since that will be a policy change, the national accounts committee will have to work out a methodology," the official added.

EARLY BUDGET: DATA CHALLENGE

• FinMin asks CSO to bring forward GDP advance estimates by a month to January
   
• CSO turns down request for advancing official release
   
• To informally share early estimates with FinMin by January 10, based on available data
   
• The early estimates to be based largely on assumptions about second half
   
• CSO to continue with traditional advance estimates date for February 7