pandemic-and-data-crisis

Context: The absence of data on migrants, which affected the government’s response during the Coronavirus crisis, is a glaring reminder of why we need to improve our statistical systems. 

Need of data during a crisis

  • Data on consumption, employment, wages and incomes are elementary indicators of economic health, and ought to be available on a regular basis without any significant lag. 
  • It is essential for effective policy responses to be mounted even during normal times. But they are all the more necessary during times of crisis.

Pandemic and data crisis: The uncertainty on Pandemic’s future course along with the lack of adequate data on basic economic indicators has put Indian economy in tatters.

  • Lack of official poverty data: The most recent consumption expenditure survey (2017-18) was junked by the government on spurious grounds, leaving the decade-old 2011-12 survey as the only official estimate. 
    • The absence of consumption data makes it difficult to say anything on poverty, food consumption etc.
  • Lack of official unemployment data: Several private research institutes have conducted surveys of migrants which suggest a sharp decline in employment as well as income levels, and a simultaneous increase in hunger.
    • The findings of the quarterly Periodic Labour Force Survey (PLFS) for the last three quarters have not been released. These are crucial in analysing wages and income which were hit maximum during the lockdown. 
    • Even the regular monthly data from the labour bureau on rural wages has not been published after January this year.
    • However data from private firms suggests that the large reach of India’s public distribution system and employment guarantee scheme, have helped the poor earn some income and secure essential purchases during this crisis. 
  • Lack of expertise in NSO methodology: Most survey agencies have developed expertise in collecting data on hand-held devices, the lack of quality data from the NSO is a problem.

Statistical reforms in the past: Previous governments had strengthened the statistical system by generating a greater variety of data, and also through the digitization of the data collection processes, which included the use of hand-held devices. 

  • Situation Assessment Surveys (SAS) of farmers in 2002-03 was done to get a better picture of their income and indebtedness following the agrarian crisis. They helped assess the profitability of agriculture, for example. 
  • Quarterly employment surveys through the labour bureau were introduced when the global financial crisis of 2008-09 hit India’s economy. These were useful in identifying the worst-hit sectors. 
  • Data from private agencies: Data on unemployment and income from private agencies, such as the National Council of Applied Economic Research and Centre for Monitoring Indian Economy, have helped better capture the problems being faced by people across the country.

This crisis has given us yet another opportunity to strengthen the country’s statistical system by further expanding our data sets and using technology to speed up data collection and dissemination.

About Household consumer expenditure (HCE) Survey: It is a massive exercise due to the size of the sample (101,651 households in 2011-12) and also questionnaire (covering the consumption of around 300 food and non-food items). Households are randomly selected based on sampling procedure and members of the household.

  • Conducted by: National Statistical Office under the Ministry of Statistics and Programme implementation (Mospi)  

Objectives: It estimates the expenditure incurred by households on consumption of goods and services. 

  • Firstly, as an indicator of level of living, monthly per capita expenditure (MPCE) is both simple and universally applicable. 
  • Households with consumption expenditure below a certain level, which is state-specific and different for rural and urban areas, are considered poor. 
    • Average MPCE of any sub-population of the country (any region or population group) is a single number that summarises the level of living of that population.
  • The food (quantity) consumption data are used to study the level of nutrition of different regions, and disparities therein. 
  • The budget shares of a commodity at different MPCE levels are used by economists and market researchers to determine the elasticity (responsiveness) of demand to income increases.
Image Source: Hindustan Times