Friday, February 23, 2024

Government must work to restore faith in Indian statistics

Fostering trust in institutions is one of the cornerstones of ensuring enduring belief in democratic systems. India’s statistical systems and infrastructure, despite its numerous warts, had a place of pride in the Indian democratic ethos and informed policymaking. But the standards of – and the lack of investments in – the official statistics collection machinery over the years have left a lot to be desired. As the 2024 Lok Sabha elections draw near, the debate on the quality of official statistics will come into sharp focus once again.

The ongoing debate on the number of Indians exiting poverty is one area in which the quality and availability of official statistics will matter not just for policymaking, but also for electoral campaigns.

This week Niti Aayog released a 411-page report claiming that 135 million Indians exited ‘multidimensional poverty’ between 2015-16 and 2019-21. According to the report, the proportion of Indians classified as ‘poor’ almost halved from 24.85% in 2015-16 to 14.96% in 2019-21.

This drastic reduction is certainly a matter of pride for Indians. But scepticism about Niti Aayog’s report could stem from the timing of its release, ahead of a string of assembly polls and the general election. Even if one were to put that down to coincidence, past questions about the utility or credibility of an MPI are likely to resurface.

The MPI, devised in 2010 by the Human Development Report Office of the United Nations Development Programme and the Oxford Poverty and Human Development Initiative, derives its conclusions from a basket of developmental elements, each allocated a specific weight. The basket has three broad categories: health (nutrition and child mortality), education (years of schooling, attendance) and living standards (cooking fuel, sanitation, drinking water, electricity, housing, assets).

The Indian version has two additions – in health, it considers child and adolescent mortality, while in living standards it has included bank accounts as an additional parameter.

One of the criticisms put forth by poverty-studies experts focuses on the wisdom of mashing together many different parameters in the same index. For example, some economists feel that clubbing outcomes (adult body mass index or child nutrition in health) with input indicators (electricity, drinking water, cooking fuel in living standards) violates the statistical grammar of indices.

Some of the criticism also focuses on the apparently arbitrary weights for each parameter. Incidentally, the debate is not only restricted to India. Resistance to substituting the monetary measures of poverty with MPI also reverberated in the World Bank ( during the MPI’s launch in 2010).

To be sure, experts scan the latest Niti Aayog report with a magnifying glass, trying to see if there are any deviations from previous methodologies. One point that’s expected to be made is that apart from bestowing the government with bragging rights just before the elections, obvious politics can be detected in the report.

The Niti Aayog report was released a week after the UNDP and OPHI released its latest report on MPI, which showed that 415 million people in India emerged from multidimensional poverty between 2005-06 and 2019-21. According to the report, India is among 19 countries to have halved global MPI values in 15 years. But the Niti Aayog report focuses only on the period between 2015-16 and 2019-21. Critics could see this as designed to obliterate any achievements of the previous government.

The good news, though, is that just before the release of Niti Aayog’s MPI report, a news report stated that the government has also announced the repurposing of the Standing Committee on Economic Statistics (in the Ministry of Statistics and Programme Implementation) as the Standing Committee on Statistics (SCoS).

The renamed panel will review the existing framework for all data collection, advise on survey methodology including sampling frame, sampling design, survey instruments and finalise tabulation plan of surveys, including finalising survey results. The renaming is to allow for expansion of the committee’s scope. The new committee is being set up despite the existence of the National Statistical Commission, which has failed to gain statutory backing in 18 years of existence.

And yet, the committee’s composition gives reason to expect positive developments and improvements in the quality and availability of statistics. Former chief statistician Pronab Sen will chair the new SCoS. Many other well-regarded professionals from the world of economics and statistics have been named members. The usual suspects from pro-government circles have been left out, despite a noisy campaign that confused the issues that plague Indian statistics systems.

It is hoped that with this committee in place, the consumption expenditure survey results at least will become available, crucial as they are for estimating poverty in the traditional style that India pioneered (the poverty line was India’s contribution to poverty studies) but has not undertaken since 2013. The survey is also needed for updating base years of various national income accounts and inflation indices.

The consumption expenditure survey of 2017-18, which was leaked to the media, purportedly captured widespread deprivation following the demonetisation decision. But the government is yet to officially release it, claiming it has concerns about the survey’s “quality”. Addressing this elephant in the room is the best way for the government to restore this confidence, especially in India’s poverty estimates.

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