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LATEST NEWS UPDATES | What does the merger of National Sample Survey Office and Central Statistics Office entail? -Prashanth Perumal J

What does the merger of National Sample Survey Office and Central Statistics Office entail? -Prashanth Perumal J

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published Published on Jun 2, 2019   modified Modified on Jun 2, 2019
-The Hindu

* Will the move undermine the NSSO’s autonomy, which has been dogged by controversies over data reporting?

The story so far: On May 23, the government announced that the National Sample Survey Office (NSSO) will be merged with the Central Statistics Office to form the National Statistical Office (NSO). Many believe that this move will undermine the autonomy of the NSSO which has been at the centre of various public controversies over data on economic growth and unemployment. The NSO will be headed by the secretary of the Ministry of Statistics and Programme Implementation (MOSPI). This is in contrast to the original plan proposed by experts to merge various statistical bodies such as the NSSO and others to create a unified statistics body that is accountable to Parliament, rather than the government.

* What is the issue?

In May, the NSSO came out with a report which cast serious doubt on the reliability of raw data that is used to calculate India’s gross domestic product (GDP). The NSSO stated that it could not either trace or classify 38.7% of the companies included in the MCA-21, a database of private companies that is maintained by the Ministry of Corporate Affairs, whose financial numbers the government currently uses to calculate GDP figures. The NSSO found that data from the Economic Census and the Business Register were far less affected by these issues that plagued the MCA-21 database.

Many believe that the poor quality of raw company data could heavily skew the measurement of private sector business growth, which is a part of the overall GDP of the economy. When data gathered from the MCA-21 database was first used to revise earlier growth figures, sectors such as manufacturing showed significant growth in size in 2013-14. This was in stark contrast to the earlier estimates that showed an actual contraction in the size of manufacturing.

* What is the government stand?

MOSPI, however, has defended the use of the MCA-21 database to calculate GDP numbers stating that appropriate adjustments are made to make sure there is no overestimation of GDP. In a clarification issued on May 10, the government stated that companies classified as “out-of-coverage” by the NSSO still contributed to the economy even though they may not fall strictly under the services sector. It further stated that the weightage given to companies that report their financial numbers is far greater and that, in reality, only about 16.4% of companies in the MCA-21 are either closed or non-traceable. The NSSO’s apprehension over the MCA-21 database still adds to concerns that already exist about the reliability of GDP data that is put out by the government due to recent changes in methodology.

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The Hindu, 2 June, 2019, https://www.thehindu.com/news/national/what-does-the-merger-of-national-sample-survey-office-and-central-statistics-office-entail/article27401039.ece?homepage=true


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