Source: The Economic Times
The recent releases that have come out from the CSO within a span of a week haven't met with much comment, since they just reinforced the existing gloom. Also, there was nothing in there that would fundamentally alter the forecast for the next year. But actually, if you look closer into the details and go a little further back, there are some surprises - the construction sector for instance. Unlike agriculture where one can expect dramatic changes in the estimates, this is one sector that should not have seen such reversal in fortunes from one year to the other in the revisions.
This switch in growth from one year to the other may not really matter now, the prospects for the construction sector remain fairly bleak and the provisional estimates for 2013-14 have been set at a very low 1.7%. Yet, it does raise questions about how the income estimates are generated and revised.
The point is not that revisions should not be there, of course these will always exist. The point is there should be more transparency over how these revisions take place, especially when there are such large changes. In the press release of 31st January there is general mention of replacing IIP estimates with those from the Annual Survey of Industries, of the divergence between these two, of the divergence between the provisional and final results of the ASI etc., but there are no specific details on what exactly has changed for the construction sector estimates.
Then there is the underlying issue of more efficient and complete data collection and management for all our estimates. There have been enough of reports from the National Statistical Commission pointing out the flaws in the existing systems. The lack of response from reporting units for instance seems to be one issue that has not been resolved; this is probably one reason why the provisional can differ significantly from the revised. The RBI has often expressed concern on the quality and timeliness of data; as their policy decisions depend crucially on the latest provisional estimates, the closer these are to the final estimate, the more confident the central bank can be of doing the right thing.
Here is a request to the next government- whichever government comes to power, there is an air of overhauling systems radically and being the change - so can we at the very least look forward to more transparent and empowered statistical agencies, please?