India plans economic data improvements, long-delayed population census

By Ruchi Bhatia
 

India’s government is planning a number of steps to improve the quality of its economic data, including kicking off a long-delayed population census, according to people familiar with the matter. 

The Statistics Ministry has made a number of proposals that have been discussed by Prime Minister Narendra Modi’s office in the past month, the people said, asking not to be identified as the discussions are private. 

These include reviving its survey of businesses, last released in 2014, and publishing the household consumption survey on an annual basis, the people said. It also plans to introduce a uniform base year for key indicators and update the basket of goods for calculating inflation, they said.

Separately, the government is also considering a new population census once elections are completed, the people said. The census is usually conducted once a decade, and was last published in 2011, with the most recent survey delayed because of the pandemic. 

Economists have frequently called for an overhaul of India’s statistics, while Modi own economic advisory council has raised concerns about the quality of the data. With India’s economy expanding rapidly and global investor interest growing, official figures are coming under more scrutiny. Relying on outdated surveys also raises the risk of policy errors.

India’s Statistics Ministry and the Prime Minister’s Office didn’t respond to requests for further information.

The census would include training and deploying more than 300,000 government staff to enumerate citizens in the world’s most populous nation, the people said. The survey exercise would likely last about 12 months, one of the people said.

Advisory Panel
 

The business survey being revived will help officials better understand the economy’s shift away from farming to other industries, the people said. 

The survey is expected to help the government tailor its policies to boost manufacturing, which has been steadily declining as a share of gross domestic product over the years. The World Bank estimates the ratio was about 13 per cent in 2022, while the government’s goal was to raise it to 25 per cent by 2025. 

The government will also appoint an advisory panel that will make recommendations to the Statistics Ministry regarding changes to the base year in key economic data and revising the weights of categories, the people said. The plans will be put into effect after elections due by May, the people said. 

Industrial production and GDP data are currently calculated using a 2011-12 base year, while consumer inflation uses 2012. 

Statistics agencies usually adjust base years every few years to better reflect changing spending patterns and economic trends over time.  

The consumer price basket will also be revised to reflect consumer spending changes in India, such as less expenditure on food and a higher contribution for digital items like mobile tariffs, the people said. 

A recent survey of household consumption showed the proportion of spending on food has dropped in urban and rural households over the past decade.