'Ministry should end controversies related to GDP computation'

There has been criticism of the official statistics ever since MoSPI came out with new methodology to estimate the GDP on the base year of 2011-12 compared to earlier 2004-05.

Former Reserve Bank of India governor C Rangarajan,  who was conferred the first P C Mahalanobis Award in Official Statistics for lifetime achievements on the occasion of the National Statistics Day on Monday, called upon the Ministry of Statistics and Programme Implementation (MoSPI) to put the controversies related to national income at rest.

He also asked the government to accord statutory recognition to the National Statistical Commission (NSC).

Delivering his acceptance speech for the award on webinar, organised to commemorate the 14th Statistics Day, Rangarajan said," I hope that there is a satisfactory end to the controversies that have arisen in the recent past on data and statistics."

The award was instituted by MoSPI.

When asked what kind of controversy was he referring to, he told Business Standard that he was referring to the estimation of national income.

"There is big controversy and I want people to remember on Statistics Day that improving statistical systems is the aim of these celebrations.

"That is why  I used the word 'satisfactory end' to the controversies that have been going on.

"It is for the statistics department to clear the doubts," he said.

There has been criticism of the official statistics ever since the ministry of statistics and programme implementation (MoSPI) came out with new methodology to estimate the gross domestic product (GDP) on the base year of 2011-12 compared to earlier 2004-05.

Even on the recently released GDP data for the fourth quarter and for the entire 2019-20, economists have raised doubts over the quality  of data.

The data showed that the GDP growth crashed to a 69-quarter low of 3.1 per cent in the fourth quarter of 2019-20.

SBI group chief economic advisor Soumya Kanti Ghosh had said that possibly the loss in Q4 because of lockdown may have been evenly distributed across quarters.

He estimated that Rs 1.18 trillion loss was distributed across quarters in FY20 and Q4 accounted for only 50 per cent of that.

On an unchanged Q1, Q2 and Q3 numbers, the Q4 growth comes at just 1.2%, he had said.

Rangarajan also said,"The statutory recognition to NSC should come as early as possible."

It was the commission chaired by Rangarajan that had recommended setting up of NSC to review statistical system and quality of data in the country.

Rangarajan said right now NSC is functioning as a result of an executive order.

"This is only the legislation which will put it at the top. Otherwise, the (statistics) department partly listens to it, sometimes does not listen to it.

"Once you put it in legislation, it will clearly state what is its role," he said.

A draft Bill on NSC was earlier put in the public domain by MoSPI.

However, there was criticism that the government may have powers to override the advices by NSC.

Rangarajan said,"Ultimately, it is the government that is to act. NSC can be advisory, but the whole point is that there should be a convention that the government accepts its recommendations."

He cited the example of finance commission to buttress his point.

"For instance, technically speaking even the finance commission is advisory.

"It is for the government to accept its recommendations.

"But, when its recommendations are given, the government says it accepts those," he said.

Similarly, a convention must be established that specific advices given by NSC should be accepted by the government, Rangarajan said.

On the occasion, chairman of the economic advisory council to the prime minister Bibek Debroy said COVID-19 has flagged the issue of re-prioritisation of the government sector and paucity of its resources.

It has raised the issue of re-allocating the government expenditure to the health sector, he said.

The National Statistics Day is celebrated in the country since 2007 to popularise the use of statistics in everyday life and sensitise the public as to how statistics help in shaping and framing policies.

It is celebrated on the birth anniversary of acclaimed statistician P C Mahalanobis.