00:00 Welcome to BQ Prime. The government has formed a new standing committee on statistics to
00:05 advise on official data generated. Now, this committee is also being chaired by ex-chief
00:11 statistician of India Pranab Sen and will replace another committee headed by him that
00:17 was formed in 2019 to advise on economic data. Dr. Sen, thank you so much for taking time
00:23 out for us today.
00:24 It's a pleasure.
00:25 To begin with, just considering how wide and how loud the criticism around several government
00:37 data sets have been of late, I do want to ask you where you intend to start off. And
00:42 I completely understand that there's a committee that's been set up. It has multiple members.
00:48 You will meet and eventually put out a report. But I do want to ask you, where do you intend
00:53 to start? What do you think are the biggest challenges that the statistical system today
00:59 faces and what are you looking at first and foremost?
01:04 Well, I think the biggest challenge is that the demand for data is increasing at a rate
01:13 which outpaces the capacity of the system to generate it. And that's a problem. You
01:21 know, earlier the principal users of data were in government. But now the use of data
01:28 outside government is growing very rapidly with dimensions that the government never
01:36 considered at that time.
01:39 All right. So, you know, the census, for instance, is going to take a while, especially considering
01:47 its current status. Once work on the census does begin again and leading up to the point
01:53 where it's published, we're a very long way away from that. The same stands for multiple
01:58 other data sets as well. So, in the interim, what do you suggest?
02:03 Well, there aren't very many choices, you know, Pallavi. When we are talking about data,
02:11 which is either at the household level or at the firm level, there is no alternative
02:20 to having the census and the economic census both available to us. There is no option because,
02:29 you know, when we collect this data, it's usually done on the basis of a sample survey
02:34 and the sample has to be drawn in a manner which is representative of the entire country.
02:43 And the only basis on which we can draw such a sample is either the population census or
02:49 the economic census. And at the moment, we don't have recent editions of either.
02:55 All right. So, you know, considering the criticality of the census, and initially we understand
03:04 that there was a delay because of the pandemic. But ever since, we've heard very little, at
03:10 least from the government on progress about the census. So, I mean, should there, and
03:16 I also want to understand if that's something you're going to be looking at, in the sense,
03:20 you know, should not there be a law or something a little more effective to ensure that such
03:27 long delays, such long gaps between the census and even other kinds of surveys that are important
03:35 for decision making can be avoided?
03:37 Well, you know, as I said, there is a Census Act. The problem, of course, is that the Census
03:46 Act is administered by the Home Ministry. It is not done by the Ministry of Statistics.
03:52 Right. And it is entirely up to the Home Ministry to decide when to conduct the census. You
04:00 know, it has been a tradition to do it on the first year of a new decade. So, it should
04:07 have been done in 2001. It didn't happen. But it should be done as quickly as possible.
04:15 But you know, as I said, that in the absence of a census, all the surveys that we do, which
04:22 are particularly the household surveys, are going to be less accurate, because we are
04:29 we working with a population data, which is now 12 years old. And the population has changed
04:36 quite dramatically, both in its numbers and in the way it is distributed across the country.
04:43 So, is that something you're going to be looking at? I mean, why the census is under the Home
04:50 Ministry?
04:51 We can't be looking at it, Pallavi. You know, we will simply have to take it as given and
04:56 then try to figure out what would be the level of inaccuracy of our survey results.
05:04 All right. But one of the criticisms...
05:08 Sorry, sorry, please continue.
05:10 I said we cannot correct for the absence of the census.
05:13 Yeah, of course.
05:14 We can estimate how much the error could be.
05:18 Right. But also the fact that one of the criticisms, and I do not know how misplaced it is or it
05:25 isn't, has been the fact that the census is carried out by the Home Ministry. Some statisticians,
05:33 commentators on such issues have said that maybe the census also should be brought under
05:40 the Statistics Ministry or something more appropriate, instead of the Home Ministry
05:46 actually being in charge. So, I do want to know, is that also something that the committee
05:51 would want to look at and give recommendations on?
05:56 No, certainly not. There is a good reason why the census is under the Home Ministry.
06:02 You know, census is such a massive operation. And I don't know if you realize, the last
06:08 census, the 2011 census, involved two and a half million people going out into the field.
06:16 You know, the Ministry of Statistics does not have that kind of a reach. The Home Ministry,
06:21 on the other hand, does have that reach, which is why the census is housed there. They have
06:28 the authority to be able to commandeer government servants at various levels at the centre and
06:35 states to be able to conduct the census operation. MOSPI cannot do it.
06:42 Alright, got that. Also, on individual area of statistics, so employment, for instance,
06:48 is one. Are you satisfied? Of course, we have seen some progress on that, considering we
06:54 did not have even this data at this frequency earlier. But do you still think that there's
06:59 scope for like a quarterly government data release, which is published with, you know,
07:05 higher frequency?
07:06 Yes, I think there's scope for improvement there. I mean, there have been delays, and
07:13 the reasons for which I do not understand. But the data is collected on a regular basis.
07:20 But there seems to be some problem with the release of the data on a timely basis.
07:26 Alright, okay. And also moving to CPI again. So, the basis for the database, the CPI's
07:35 database also is extremely outdated. We were waiting for the household expenditure survey.
07:41 I believe in a recent interview, you did say that it's been conducted and for checking
07:45 robustness of data, you're waiting for another round to happen before the database for the
07:51 CPI can be reworked accordingly.
07:55 Yeah. So, well, let us first see what the data that we've already collected, which is
08:02 for the year 2022-23, what it looks like. It may well be the case that the data is good
08:09 enough to compute the CPI from that. But if we have any doubts, we will hold off until
08:17 the second survey is completed, which will be 2023-24.
08:23 Alright. So, even assuming it's the first option that actually plays out, we're still
08:29 a little while away from a new database for the CPI. Is that correct?
08:34 Yes, it will take a while because, you know, the data collection ended on June 30th. Now,
08:43 they're going to compile the data and by the time we start getting the initial results,
08:48 it will probably be November or thereabouts, November, December, somewhere around that
08:53 time.
08:56 Once that is done, the basket of goods and services that would go into CPI would be determined.
09:07 Once that basket is determined, then we would have to do a very detailed market survey to
09:15 be able to determine the exact definition of each good and service whose price would
09:21 be measured. So, for instance, that if the item, let us say the product is toothpaste,
09:31 you have to go down to a specific detail saying this brand toothpaste of so and so packet
09:39 size. So, it will be like something like Colgate 200 gram, something of that kind. You have
09:47 to go down to that degree of precision. And that can only be done with a detailed market
09:52 survey. Now, the market survey itself will take another four or five months. So, the
09:58 earliest you could probably expect the CPI would be late next year.
10:05 Got it. All right. Okay. And about the IIP, again, research from multiple economists seems
10:13 to suggest that there is a widening gap. And in fact, I do remember asking you this earlier.
10:19 You did say that the way the manufacturing GVA is computed is different from IIP and
10:26 hence the disconnect. But is that something as well that needs to be looked at? I mean,
10:31 keeping aside the reason, do you feel that there should be greater correlation between
10:38 the two?
10:39 Well, you see, the thing is IIP and the GVA measure two very different things, right?
10:50 The IIP measures the volume of production. Okay? It's a pure volume measure, such as
10:59 how many cars. What it doesn't measure is what is happening to the quality, nor does
11:08 it measure what is happening to productivity. The GVA picks up both those influences. So,
11:18 as far as the IIP is concerned, as I said, it's a volume measure. And a volume measure
11:24 is important. We need it because employment is usually linked with volumes of production.
11:32 But in terms of incomes generated, in terms of the GDP, the other factors such as productivity
11:39 and the quality of products also become very important. So, the two are meant for different
11:45 purposes and to get exact correlation between the two is not even expected.
11:52 In that case, do you think there is need for other surveys or maybe adding other components
11:57 to IIP? So, you know, just for instance, top of my head, considering the kind of volatility
12:03 we've seen in commodity prices, clearly IIP was only giving some part of the picture.
12:09 So, is there a need to kind of substantiate that with other data? If not,
12:15 Well, you know, the as I said, the IIP measures only volumes. Okay, number one. Number two,
12:23 the IIP measures only manufacturing. So, it's an index of industrial production. It's not
12:31 capturing services. It is not capturing agriculture. Those are captured by other data sets. Okay,
12:39 so the IIP is limited essentially to manufacturing. So, clearly, manufacturing is in fact a relatively
12:51 small component of our GDP. I mean, it accounts only a little over 20%. There are so many
12:59 other dimensions that have to be captured and they are captured but by other data sets.
13:04 Got it. Also, do you think there is need for other data sets apart from strengthening existing
13:13 ones? So, for instance, services like you just touched upon, we at least from the government,
13:20 we don't have any indicator to measure the strength of the services sector, especially
13:25 considering its increasing significance in the Indian economy. Likewise, in case of the
13:31 informal sector, and these issues have been touched upon earlier. So, is that something
13:38 that you want to be looking at as well?
13:40 No, we've already looked at it. So, there is already a proposal to have an annual survey
13:45 of services. And that will plug precisely the gap you are talking about. That's already
13:55 in the works.
13:57 Alright, okay. Any other new databases that we're going to be looking at? Like, you know,
14:03 at the start of this conversation, you mentioned that there's clearly an increasing amount
14:10 of interest in the Indian economy that's likely to sustain and the kind of data generated
14:17 so far is increasingly unable to keep pace.
14:21 Well, yes, you know, what is happening is that the frequency, if you think about government,
14:30 the biggest user of data in government used to be the Planning Commission. Now, the Planning
14:35 Commission was making a plan, which would be implemented two and a half, three years
14:40 later. So, it was no great hurry to get data. But when you're thinking of a corporate, they're
14:48 thinking about the next quarter. So, they need data with far higher frequency. And to
14:57 be able to generate the data with that kind of a frequency is both difficult and expensive.
15:04 So, we have to experiment with other kinds of data. But so far, the experiments that
15:10 have been done have not proven to be very fruitful, because most of that data set is
15:18 in the administrative data that's kept by, generated by various ministries in the government.
15:25 And since that data is used essentially for monitoring purposes, there is some question
15:33 about its accuracy.
15:35 Okay, got it. So, you know, again, another constant criticism in recent years, especially
15:45 has been regarding, you know, questions surrounding independence, non-interference from the government.
15:54 So as the head of a committee, how does one, how does the committee ensure that these are
16:01 not questions consistently raised on India's data systems?
16:06 Well, you know, this committee cannot do so. This committee is really a committee which
16:14 is, whose function is to assist the Ministry of Statistics to produce data of the right
16:25 quality and of the right type. The function of making sure that the data that is generated
16:35 by the system is not influenced by politics is that of the National Statistical Commission.
16:44 This committee is not supposed to take over the functions of the NSC.
16:49 All right, got it. So, thank you so much for taking time out for this. Always informative
16:58 to speak to you.
16:59 Pleasure, Kuldeep. Thank you.
17:00 Thank you.
17:01 Thank you.
17:01 Thank you.
17:02 [BLANK_AUDIO]
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