Data tangle: Making economic policy is compromised. It is important to update the statistical system
There have been two occasions in the past week when GOI executives have wished that India produced more dependable agricultural statistics. First, Nirmala Sitharaman, the finance minister, argued for a real-time evaluation of crop yields and pointed out that, occasionally, there are last-minute scrambles to import vegetable oil or pulses to make up for insufficient domestic production. Separately, the Union food secretary claimed that estimates of wheat output from the GOI and the trade were inconsistent. 112.7 million tonnes is around 10 million tonnes more than the market projection for 2022–2023 according to the GOI.
Farm production data issues have repercussions in the real world. According to GOI predictions, production will rise in 2022–2023 for both rice and wheat. However, export restrictions have been put in place in an effort to lower domestic price increases that diverge from production figures. Export restrictions have a negative impact on farmers. Additionally, they damage the nation's standing as a trustworthy supplier. Additionally, it makes it more difficult for the RBI to change interest rates to keep inflation within the required range. Poor data causes a delayed response to changing rates, which causes severe adjustments that have an impact on other economic sectors.
Hopefully, as technology advances, farm output projections will be more accurate. For instance, to improve the accuracy of data on acreage, the GOI has started a trial digital crop survey in 12 states during the current kharif season. Some of Isro's satellite-related innovations promise to produce benefits shortly.
It's true that quality problems currently affect practically all types of economically significant data. Numerous other data sets that rely on the census to create samples have been impacted by the delay in conducting the census. GOI's current programs are also harmed by this delay. For instance, the Census of 2011 revealed that women make up 30.3% of India's 118.7 million cultivators. Some GOI agricultural program guidelines mandate that implementing organizations dedicate at least 30% of budgetary resources to women farmers. What percentages still hold true today? Over the past ten years, there has been a significant transformation in the way business is conducted from traditional to digital methods. However, India's GDP base year is more than ten years old. Policymaking will continue to be constrained if the statistical system does not receive the necessary attention. The sway must stop
