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Issues with India's Statistical System

2020 JAN 18

Mains   > Polity   >   Institutions/Bodies   >   Government agencies

WHY IN NEWS?

  • The government has decided to merge the National Sample Survey Office (NSSO) with the Central Statistics Office (CSO) to form an overarching body - National Statistical Office (NSO).
  • In January 2019, two members of the National Statistical Commission resigned from their posts alleging interference by the government, including refusal to release the employment survey data.
  • Over the past few years, a growing number of economists and analysts have raised questions about India’s new gross domestic product (GDP) series.

WHAT IS STATISTICS:

Statistics is a mathematical science involving the collection, analysis, and interpretation of data, as well as the effective communication and presentation of results relying on data. Through application of various tools and techniques in statistics, the raw data becomes meaningful and generates the information for decision making purpose.

NEED OF GOOD STATISTICAL SYSTEM:

  • For evidence-based Policy formulation:
    • In simple terms, statistical data are the evidence on which policies are built. They help identify needs, set goals, and monitor progress.
    • The national economic policies and the various sectors of the economy make it imperative for building up macroeconomic planning models. This kind of model build-up is only possible with availability of timely and reliable statistical information.
  • Identifying flaws and ensuing accountability:
    • In monitoring and evaluation of ongoing economic reform programmes, statistical data is vital, as it will provide the necessary information on performance indicators which serve to measure the impact of policy and programmes on the quality of life of target populations.
    • Without good statistics, the development progress is blind: policy makers cannot learn from their mistakes, the public cannot hold them accountable.
  • Forecasting:
    • Quality data is essential to make reliable predictions on various aspects of a nation.
    • E.g.: It is increasingly important to have high quality statistics on the population and projections of the population, for policy development and for planning and providing public services.
  • For good governance:
    • Good statistics are essential to manage the effective delivery of basic services. Good statistics also improve the transparency and accountability of policy making, both of which are essential for good governance, by enabling people to judge the success of government policies and to hold their government to account for those policies.

PRESENT STRUCTURE:

  • The Ministry of Statistics & Programme Implementation (MoSPI), Government of India is the nodal agency for planning and facilitating the development of the statistical system in the country. It lays down norms & standards in the field of official statistics, evolving concepts, definitions, classification and methodologies of data collection, processing and release of results.
  • The Ministry has two wings, one relating to Statistics and the other is Programme Implementation. The Statistics Wing called National Statistical Organisation (NSO) consists of the Central Statistics Office (CSO) and the National Sample Survey Office (NSSO).

 

  1. Central Statistics Office (CSO): The CSO coordinates the statistical activities in the country and evolves statistical standards. Some of its key publications are the Gross Domestic Product (GDP), Index of Industrial Production (IIP) and the consumer price index (CPI). The CSO has 6 Divisions:
    • National Accounts Division (NAD): This Division is responsible for the preparation of national accounts, which includes Gross Domestic Product, Government and Private Final Consumption Expenditure etc
    • Social Statistics Division (SSD): This Division is entrusted with Statistical monitoring of the Millennium Development Goals, Environmental Economic Accounting, Grant-in-aid for research etc.
    • Economic Statistics Division (ESD): This Division conducts Economic Censuses and Annual Surveys of Industries (ASI), compiles All India Index of Industrial Production (IIP) etc.
    • Training Division: This Division is primarily responsible for the training manpower in theoretical and applied statistics to tackle the emerging challenges of data collection, collation, analysis and dissemination required for evidence-based policy making. The Division also looks after the National Statistical Systems Training Academy (NSSTA).
    • Coordination and Publications Division (CAP): The Division looks after co-ordination work within CSO as well as with the line Ministries and State/UT Governments in statistical matters. The administrative work relating to Indian Statistical Institute (ISI) is also looked after by CAP Division.
    • Data Storage and Data Dissemination (DSDD) including Computer Centre: handles the data processing jobs of the MOSPI, provides training to statistical personnel on software, maintain the MOSPI’s website and the National Data Warehouse of Official Statistics.
  2. National Sample Survey Organisation: NSSO is responsible for conducting large-scale sample surveys in diverse fields on All India basis. Primary data are collected through nation-wide household surveys on various socio-economic subjects, Annual Survey of Industries (ASI), etc.
    • NSSO also collects data on rural and urban prices and plays a significant role in the improvement of crop statistics through supervision of the area enumeration and crop estimation surveys of the State agencies.
    • The NSSO has four Divisions:
      1. Survey Design and Research Division (SDRD): This Division, located at Kolkata, is responsible for technical planning of surveys.
      2. Field Operations Division (FOD): The division is responsible for the collection of primary data for the surveys undertaken by NSSO.
      3. Data Processing Division (DPD): The division is responsible for sample selection, software development, processing, validation and tabulation of the data collected through surveys.
      4. Co-ordination & Publication Division (CPD): This division coordinates all the activities of different Divisions of NSSO and brings out the bi-annual journal titled “Sarvekshana”.

NATIONAL STATISTICAL COMMISSION (NSC):

  • National Statistical Commission was established in 2005 based on the recommendations of the Rangarajan Commission.
  • The commission was established through an executive order and it works under the Ministry of Statistics and Programme Implementation. However, it reports directly to the Parliament.
  • It consists of a part-time Chairperson, four part-time Members, an ex-officio Member and a secretary.
    • The Chief Statistician of India who is the Head of the National Statistical Office is the Secretary of the Commission
    • The Chief Executive Officer of the NITI Aayog is the ex-officio Member of the commission.
  • The objective of its constitution was to reduce the problems faced by non-statutory statistical agencies like the Central Statistical Office (CSO) and the National Sample Survey Organisation (NSSO) in relation to collection of data

ISSUES:

  • Unreliable quality of data:
    • In many occasions, the agencies extrapolate small volume of data to come to conclusions. For instance, the CSO relies on sample survey conducted by the RBI to compute estimates for the corporate sector. The RBI sample consisted of only a few thousand companies, and hence the estimates are blown up.
    • The use of formal sector indicators to estimate informal sector growth (such as using growth rates of the organized manufacturing industry to estimate growth for unorganized manufacturing) questions the reliability.
    • Also, the recent back data GDP calculations were criticized for use of untested database.
  • Political interference:
    • There have been concrete instances of political interference in the functioning of the system. This questions not only the credibility of the agencies, but also undermines the principles of transparency and accountability of ruling government.
    • E.g.: The interference of NITI Aayog in releasing GDP back data and the withholding of Periodic Labour Force Survey (PLFS) 2017–18 report.
  • Shortage of human resource:
    • National Statistical Systems Training Academy (NSSTA) is the premier Institute fostering human resource development in Official Statistics. However, there are very few institutes like the NSSTA in the country.   
    • Shortage of specialist human resource continues to be an issue. The Indian Statistical Service
  • Internal conflicts:
    • As far as NSSO surveys are concerned, the NSC has regulatory powers. However, its oversight of CSO’s activities is very limited. CSO could ignore the NSC’s instructions when it wants to.
    • Over the years this has created repeated tussles within the Ministry, which in turn has resulted in withholding of financial allocation to departments and delayed release of reports.
  • Limited use of modern technology:
    • The agencies have been relying on old practices such as sample collection from household surveys. In the current information age, there is a huge volume of data available in the public, which can be utilized effectively through the tools of big data and Artificial Intelligence.
    • Across the world, analysts and researchers have been using these data to create more reliable stats. However, in India, no concrete efforts have been taken to tap into this potential.

WAY FORWARD:

  • The road to improving credibility of official statistics will be a long one.The best way to attain it is to finalize the National Policy on Official Statistics’. The policy seeks to create synergy between the Centre and the states in statistical matters and promote an ecosystem for “informed debate” on various social and economic issues affecting people’s lives. The draft is presently being prepared by the MoSPI.
  • In the current information age, there is a huge user base armed with sophisticated tools and techniques to dissect the data, and hence it will not be difficult to collate data from various sources to check for their consistency and coherence. An integrated information system is a sine qua non for the three basic expectations of quality, consistency and coherence of data. Therefore, we need an integrated system to produce consistent official statistics.
  • In a decentralised system with potentially multiple ownership of data, robust data governance and authentication, and audit trails, it is difficult to manipulate data. However, the present decentralised system is greatly rigid, convention-bound and lacks a strategic vision. An integrated system with web-based reporting, built-in quality checks at the time of filing of data, process-driven follow-ups on timeliness and quality of data, can be of much help.
  • For revamping the systems of data collection, we need to think innovatively. A well-integrated and advanced information technology (IT) infrastructure, professional excellence and high level of coordination at all levels of operation for the generation of statistics can deliver high-class data on various dimensions of the economy. We need to go for big data technology and Data Warehouse along with a web-based reporting system for capturing the data.
  • The CSO needs a state-of-the-art system for collation of data from multiplicity of sources, including private sector, to undertake such an exercise satisfactorily.

CASE STUDY: The United Kingdom’s Statistics Authority

  • The UK Statistics Authority is a non-ministerial government department of the Government entrusted with a statutory objective of promoting and safeguarding the production and publication of official statistics that serve the public good.
  • It is an independent body at arm’s length from government. It was established in 2008 and is directly accountable to the Parliament of the United Kingdom.
  • Its independence and powers to report directly to the Parliament has helped it create an unbiased credible statistical data management system, with no possibility of political influence in it.

Prelims Question

Q. Redesigning India's ailing statistics system is the need of the hour. Analyze the statement giving suitable measures to rectify it?