Holes in Official Data

In recent weeks the already poor image of India’s official statistics system has taken a further beating. When the estimates of gross domestic product (GDP) for the first quarter (April-June) of 2010-11 were released on 31 August, a glaring discrepancy was immediately noticed. GDP estimated at factor cost was estimated to have grown by 8.8% in April-June, but what was estimated at market prices was said to have grown by just 3.65%! The error – attributed to the use of the wrong deflators – was quickly corrected the next day and GDP growth at market prices is now placed at 10.1%. Within a few weeks of this embarrassment, another discrepancy surfaced. The Index of Industrial Production (IIP) for July showed that the growth of capital goods production rose by as much as 63%, a figure disputed by industry associations, who, normally upbeat about any large increases, claimed that their numbers showed growth by a more modest 22%. How many more embarrassments can the once proud Indian statistical system take?

Close to a decade after the National Statistical Commission (NSC) under the chairmanship of C Rangarajan produced a voluminous report on all aspects of the national statistical system, the system is none the better. Some of the recommendations of the Rangarajan Commission have indeed been implemented, the most visible being the establishment of the permanent NSC – an apex statutory technocratic body that was expected to impart greater integrity to the official statistics system. In the interest of public accountability, one should ask how official statistics have fared after the establishment of the NSC and how top-level institutional changes have contributed to enhancing the credibility of the system.