Waiting for better statistics

The latest round of GDP data revisions underlines the need for a bigger fix

- RAISINA HILL A K BHATTACHARYA

About a year ago, the National Statistical Office (NSO) of the Union government announced what was certainly a much-delayed and much-needed statistical reform. Instead of releasing about half a dozen versions to estimate the country's gross domestic product (GDP) and its components, the NSO decided to release only five such iterations. The wait for knowing the final estimate of the country's economic growth was, therefore, reduced from three years to two. The decision to reduce the number and duration of these revisions was implemented starting with the GDP data for 2021-22, with its final estimate becoming available by the end of February 2024, against the earlier wait that would have lasted till February 2025.

Statisticians across the spectrum welcomed this decision, though questions remained about why the timeline for releasing a given year's GDP data and the number of revisions couldn't be reduced further. After all, many countries finalise their GDP data with fewer iterations within a year. In India, one of the reasons for a three-year wait for producing the final GDP figure was that many state-owned enterprises and government agencies took a long time in supplying the final data on their economic activities. By February 2024, the NSO, it seemed, had succeeded in persuading these entities to expedite the process.

But has the NSO been able to address another key area of concern—a disturbing variation in the different GDP estimates for the same year? To be sure, this has been a cause for concern for years. As the accompanying chart shows, the variations over these GDP iterations have moved in both directions, with the final estimate being lower as well as higher than the first estimate. Since the launch of the new GDP series data in January 2015, when the base year was changed to 2011-12, the different iterations of growth figures for nine years from 2014-15 to 2022-23 reveal an intriguing trend.