Faced with doubts over the integrity of the Gross Domestic Product (GDP) data following a change in accounting methodology that revised recent GDP growth forecasts upwards, the Indian government has decided to review the methods of collecting those estimates, setting up five committees tasked with the revamp.
According to an Economic Timesreport, the exercise is aimed at "overhauling" the method of collecting key statistics around inflation, industrial output, consumption and employment, as well as data governance in an attempt to restore the "credibility" of official economic data.
The move follows reports about India's poor record of industrial output and doubts about the accuracy of the seven per cent-plus GDP growth that the country has reported in the past fiscal. Last year, India moved to a new system of reporting GDP numbers. While the new system was in line with international reporting standards, it led to a dramatic jump in India's GDP from previous years that had used an earlier system of reporting.
Among other tasks, the new committees, headed by several experts from key institutions, will figure out ways to release back data to explain the dramatic jump in GDP growth and get industry-wise and geography-wise data, which the existing collection system does not currently cover. It will also suggest ways to combine disparate data sets spread across states and districts, along with measures to gather data online in a bid to make the process more efficient.
National Statistical Commission Chairman RB Barman has said the resulting "enhanced transparency" will help ensure the credibility of the National Statistical System, and the focus on district-level statistics will also help the calculation of the Human Development Index.
India's industrial growth numbers so far this fiscal have been the lowest in over 10 years at -0.27 per cent, as indicated by the Index of Industrial Production (IIP), faring even worse than the comparable period in 2009 following the global financial crisis.