The data debate

Govt's indifference isn't helping matters

The quality of official data is once again being debated. The point of disagreement this time, broadly, is whether the different surveys capture the rapid pace of urbanisation in India. If a particular section of the population is overrepresented or underrepresented, it is possible that the survey results do not portray the status on the ground. There are concerns also about the quality of responses in household surveys. Surveys on household consumption expenditure, health, and employment are used not only to gauge the impact of past policy interventions but also inform policymaking for the future. The importance of periodic availability of quality data thus cannot be overemphasised, particularly in a large and growing economy like India. In the absence of data, the policy establishment would practically be shooting in the dark, while the poor quality of data can lead to inappropriate interventions, resulting in suboptimal outcomes.

Given its stage of development, the Indian economy is certainly witnessing structural changes which need to be captured by a continuous refinement in data-collection systems. Public debate over the quality and possible improvements in the system thus must be welcomed. In terms of issues, poverty reduction in recent years, particularly after the pandemic, is an ongoing debate. Employment and health data are also widely discussed in pages like these.  Fundamentally, there can be at least two kinds of problems with official data — availability and quality. While the quality of data is always worth debating, availability has become a bigger issue. India, for instance, has postponed the decadal census, which had never happened in the past. It is understandable that the exercise could not be carried out in 2020 because of the pandemic. However, despite the removal of restrictions on physical movements and recovery in economic activities, the job has been kept in abeyance. According to reports, it will now be done after the 2024 general elections. This is unfortunate. Had the exercise been conducted even with some delay, the ongoing debate on urbanisation perhaps would have been more informed.

The government had earlier decided against releasing the consumer expenditure survey (2017-18) data because of quality issues. The data would have helped estimate the poverty level. In addition, it would have enabled a base revision for the Consumer Price Index and national accounts. One big policy implication is that while the Indian central bank has been, by law, given an inflation target, inflation data may not always be reflecting the actual position. It will be a while before the new survey data is available and necessary revisions are made. The priority for the government thus should be to get the necessary statistical work completed in time and make the data public. In terms of improving the quality and scope of data collection, the government can appoint a committee of independent experts. The National Statistical Commission can also do this periodically. However, it is important to ensure that data collection and dissemination are not politicised at any point because it could undermine the legitimacy of the system. Given the level of improvement and adoption of technology in India, the periodicity and quality of official data can vastly be improved to inform policy with minimal revision at later dates. Improved availability of data will help direct investment in the right areas. Unfortunately, not enough is being done in this space.