New Delhi: The Narendra Modi government’s handling of data has come under scrutiny due to a combination of miscalculations and delays in releasing crucial datasets.
For instance, the Annual Survey on Unincorporated Sector Enterprises (ASUSE), vital for understanding the informal sector’s dynamics, has not seen a release since 2015-16, despite being slated for annual updates. Even though subsequent rounds were conducted, the government has not made the results public.
This delay is particularly concerning given the significant impact of policy changes like demonetisation and GST, and the COVID-19 pandemic on the informal sector.
Similarly, doubts have been raised about the accuracy of GDP calculations, with experts like Pronab Sen expressing concerns about potential overestimations.
A lack of data hampers the measurement of how an economy consumes. Misrepresentation of consumption data could lead the government to believe that certain sectors are thriving when they are actually struggling.
Also read: With a Rising GDP, but Slow Consumption and Low Savings, Is India’s Workforce Thriving or Surviving?
Delayed ASUSE report
There are 92.4% informal workers, with no written contract, paid leave and other benefits, in the Indian economy. And the informal sector contributes around half of the GDP of the country. Its dominance underscores the importance of understanding its growth.
ASUSE provides data on non–incorporated non-farm sector enterprises or informal sector enterprises. These form a large chunk of of the micro, small and medium enterprises.
However, the latest ASUSE report available is for 2015-16. Since then, the survey was scheduled to be conducted annually, but the results for four years, spanning from 2016 to 2020, have not been released.
The first round of the annual survey was experimental and ran from October 2019 to March 2020. Since then, two full-fledged ASUSE rounds (2021-22 and 2022-23) have been completed and a third round is underway (2023-24), an official from the Ministry of Statistics and Programme Implementation (MOSPI) told data journalist Pramit Bhattacharya in response to an RTI query.
Bhattacharya’s queries about whether (and when) ASUSE factsheets will be released elicited no response, as he wrote in a column for Mint.
‘The ministry’s refusal to release the ASUSE data is deeply problematic. It defeats the very purpose of such an annual survey: providing timely data on the country’s informal sector to policymakers, investors, researchers, startups, and ordinary citizens,” he said.
Despite the significant impact on the informal sector resulting from policy changes such as demonetisation and GST, and the COVID-19 pandemic, there appears to be a lack of effort in collecting data to assess the current situation, which is crucial for policymakers to devise effective strategies and improve conditions.
This, however, is a case of delay.
Several economists such as Jayati Ghosh, Pronab Sen, and Santosh Mehrotra have expressed concerns over the way the data has been calculated.
Also read: The Rising Discrepancies in Indian GDP Data Point to a False Growth Story, Say Experts
Concerns over GDP data
India’s former chief statistician and now Chair, Standing Committee on Statistics, Pronab Sen told Karan Thapar that the data on which India’s GDP is calculated is “a major concern”, and if not corrected soon, India’s GDP growth figures could become “unreliable”. He said he believes the Q1 GDP growth figure of 7.8% is an overestimation, and believes 6.5% is more accurate.
He further said that the recent Periodic Labour Force Survey’s (PLFS) findings that 58% of the workforce are self-employed is not an indication of increasing self-entrepreneurship (as claimed by SBI economists) but distress employment.
The PLFS survey said that India’s unemployment rate has reached a six-year low. However, this decrease in unemployment, or increase in jobs, was attributed to a rise in a significant number of individuals engaging in self-employment or unpaid labour.
Unpaid labour – which is categorised as ‘helper in household enterprise’ within self-employment – has increased to 18.3% in 2022-23 from 17.5% in 2021-22 and 17.3% in 2020-21, according to the PLFS survey.
“A regular worker gets a salary, an unpaid family labour within the self-employed gets nothing; an own account worker, [as earlier mentioned], is someone who in rural areas is a cultivator and will earn something when their crop is finished and [when] they sell it. So, what’s happening is that regular people [who have] lost work have gone to do something on their own,” Santosh Mehrotra, professor of economics, Centre for Informal Sector and Labour Studies, School of Social Sciences, Jawaharlal Nehru University, told The Wire.
He further explained that people are choosing to be self-employed, because of a lack of good work and wages. For example, an educated person would not want to do casual labour jobs.
Separately, The Wire’s M.K. Venu wrote in March: “There is a clear mismatch between GDP growth and private consumption. For 2023-24, GDP growth is officially projected at 7.6% but consumption growth is just about 3%.”
Historically, consumption growth has nearly been at the same level as GDP growth, or slightly lower, according to Sen. However, the current gap is much wider, at nearly 5 percentage points. This has never happened before, and is completely inexplicable, he told the Financial Express.
Methodological changes in consumption expenditure survey
The government released the Household Consumption Expenditure Survey of 2022-23 after over a decade. However, comparisons with earlier surveys are complicated due to methodological changes, Santosh Mehrotra and Rakesh Ranjan Kumar wrote for The Wire.
The survey’s methodology on sampling and questionnaire had a different structure as compared to how previous surveys were conducted.
The household consumption survey report was released after 2011-12. Photo: Unsplash
In the 2022-23 survey, the NSSO has included the imputed value of certain items received for free by households through social welfare programmes. These items include food like rice, wheat, pulses, and non-food items such as laptops, mobile phones, bicycles, and clothing.
Therefore, the monthly per capita consumption expenditure (MPCE) of rural and urban households which includes the imputed value of free food and non-food items is higher compared with the MPCE which does not include the free items.
Imputed value is an assumed value given to an item when the actual value is not known or available. Therefore, it’s unclear who has benefitted the most in absolute terms.
