Govt scraps NSO's consumer expenditure survey over 'data quality'

The government has decided to scrap the National Statistical Office’s (NSO’s) consumer expenditure survey conducted in 2017-18 over “data quality”.

“In view of the data quality issues, the Ministry (of Statistics and Programme Implementation) has decided not to release the consumer expenditure survey results of 2017-2018. The ministry is separately examining the feasibility of conducting the next consumer expenditure survey in 2020-21 and 2021-22 after incorporating all data quality refinements in the survey process,” an official statement released on Friday said.

This implies that India will unlikely have an estimate on poverty for a period of 10 years. The previous round of survey took place in 2011-12. The government uses this dataset to estimate poverty and inequality in the country, apart from using it for changing the base year for gross domestic product (GDP).

The findings of the report, published by Business Standard on Friday, showed consumer spending falling for the first time in over four decades in 2017-18. The government has, however, termed it a “draft” report.

This is the first time the government has scrapped an NSO survey of this scale since the erstwhile NSSO was established in 1950.

“We would like to emphatically state that there is a rigorous procedure for vetting of data and reports which are produced through surveys. All such submissions which come to the ministry are draft in nature and cannot be deemed to be the final report,” the ministry said in the statement.

The government said it had found certain deficiencies in the survey report which were later referred to a committee. It further argued that the Advisory Committee on National Accounts Statistics had recommended a change in base for the GDP series from 2017-18, as it was not considered to be an “appropriate year”.

“The results of the survey were examined and it was noted 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 ministry said.

While welcoming the government’s statement on fine-tuning the consumer expenditure survey, former chief statistician Pronab Sen said the government should have released its findings, despite 2017-18 being an “unusual year”. “During my tenure as chief statistician, the consumer expenditure survey took place in 2009-10, which coincided with the worst drought in 40 years and a global economic crisis. So, we had decided to change the base year to 2011-12, but had still released the 2009-10 report. We didn’t suppress the data,” Sen said.

Consumer expenditure surveys are normally conducted with a gap of five years. But in 2011-12, the survey was conducted after two years, as 2009-10, when the previous round of the survey took place, was a drought year. The findings of both 2009-10 and 2011-12 survey reports are in public domain.

The government’s statement on Friday said concerns related to the consumer expenditure survey were also about its ability to capture consumption of social services by households, especially on health and education.

The ministry said a committee examined the survey report and noted these “discrepancies” and came out with recommendations, including a refinement in the survey methodology and improving the data quality on a "concurrent basis."

"The recommendations of the committee are being examined for implementation in future surveys," the official statement said.

The survey — Key Indicators: Household Consumer Expenditure in India — showed the average amount of money spent by a person in a month fell by 3.7 per cent to Rs 1,446 in 2017-18 from Rs 1,501 in 2011-12. The figures for monthly per capita consumption expenditure (MPCE) are in real terms, meaning it has been adjusted for inflation keeping 2009-10 as the base year. In 2011-12, the real MPCE had risen 13 per cent over a period of two years.

What the government said:

• Results of the survey show significant divergence in consumption pattern and with administrative data sources

• Survey lacks ability to capture consumption of social services by households, especially on health and education

• The survey findings, reported by Business Standard, were based on a draft report

• The ministry will examine the feasibility of conducting the next consumer expenditure survey in 2020-21 and 2021-22