CSO & NSSO Merger: Reforming Statistical Institutions

In 2000, a committee headed by former Reserve Bank of India (RBI) governor C. Rangarajan suggested the establishment of NSO as the nodal body for all core statistical activities. It would have worked under the National Statistical Commission (NSC), which was to be answerable to Parliament, not the government.

• The intent was to clean up collection, calculation and dissemination of data. NSC was set up in June 2005, but didn’t have a statutory role. It was given supervisory powers over one arm of the statistical system, NSSO.
• The idea of an NSO that would include NSSO and CSO was not affected and the 2005 decision had proposed, the National Statistical Organisation, as “the executive wing of the government for statistics” that would “act according to the policies and priorities as laid down by the National Statistical Commission.”
• Both the wings are currently part of the Ministry of Statistics and Programme Implementation (MoSPI) and functioning independently.
• The CSO brings out macro-economic data like economic (GDP) growth data, industrial production and inflation. While, the NSSO conducts large-scale surveys and brings out reports on health, education, household expenditure and other social and economic indicators.

In May 2019, the NSSO came out with a report which cast serious doubt on the reliability of raw data that is used to calculate India’s gross domestic product (GDP).

• The NSSO stated that it could not either trace or classify 38.7% of the companies included in the MCA-21, a database of private companies that is maintained by the Ministry of Corporate Affairs, whose financial numbers the government currently uses to calculate GDP figures.
• The NSSO found that data from the Economic Census and the Business Register were far less affected by these issues that plagued the MCA-21 database.
• Allegations of fudging growth numbers data and tinkering with jobs data on government. Numbers are sacrosanct and international organizations rely on them to arrive at their own estimates for a country’s growth trajectory and economic potential. These estimates help them make decisions related to investments and trade.

This is helpful in paving way for:

• According to MOSPI, the new framework would streamline and bolster its present nodal functions and bring in more synergy by integrating its administrative functions within the ministry.
• Robust and reliable data generation. More efficiency in data collection and dissemination.
• Sound policy formation based on the unambiguous data which will lead to better decision making which will in turn lead to the prosperous economy.
• Bottlenecks of the economy will be identified and proper correction recourse will be followed.
• Weak sectors of the economy will be identified and policies can target them efficiently with minimal inclusion and exclusion error.

• The merger of CSO and NSSO—an entity separate from Mospi—will take away the latter’s autonomy. The order seems to suggest NSC’s independent oversight mechanism will no longer exist and makes no mention of that.
• The order clearly puts the merged entity under Mospi secretary, raising questions about the independence of the process through which official survey data is collected and published.
• The move will give the government greater leverage over production of key data.
• The lack of transparency in the production of economic data can over time cause the users of such data to discount its value. This has been the case in countries such as China where the constant tinkering in official economic data has caused analysts to lose trust in them

• As this is in contrast to the original plan proposed by Rangarajan Committee to merge various statistical bodies such as the NSSO and others to create a unified statistics body that is accountable to Parliament, rather than the government. It should be brought under Parliament.