House panel demands new method to guage economy

House panel demands new method to guage economy
Since computing economic growth numbers with 2011-12 as the base year has raised more questions than answers, a Parliamentary Committee has demanded more realistic computation method which reflects the momentum of actual economic activities across the sectors.

The Standing Committee on Finance said that lack of reliable and quality data poses a serious challenge to economic policy-making and its revival especially for employment. It recommended that the Ministry of Statistics and Programme Implementation examine the possibility of revising national accounts annually to preempt controversies and debates that are being generated at present.

The GDP computations are based on accounting information available with producing entities. However in India, with a large informal sector, there is a large segment of the economy for which regular accounts information is not available and their contribution can only be assessed from surveys on unincorporated enterprises conducted usually with a five-year interval.

“Needless to emphasise, lack of reliable and quality data poses a serious challenge to economic policy-making and its revival especially for employment. The committee would therefore urge the government to deploy the infrastructure available with the MOSPI for collecting regular and up-to-date data on vital parameters like unemployment,” it said. Unlike in developed countries, where macroeconomic data is released every month, the NSSO conducts surveys on employment only once every five years.
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