Economic data will help politics – editorials
The Indian economy will contract this year. Economic policy must have two clear objectives. You must do everything possible to ensure the revival of growth. And until that happens, the state must guarantee that the poor can maintain at least basic living standards. Achieving these goals requires detailed information about the economy. What was the household income before the coronavirus pandemic? Were they enough to satisfy consumption needs? Wealthy households more indebted than their poor counterparts? Which parts of the country are likely to be disrupted by remittances due to reverse migration?
Unfortunately, there is too little recent data, much less real time, to answer these questions. The latest available consumer spending survey dates back to 2011-12. Data on household assets and liabilities is from 2013. Although the Periodic Workforce Survey (PLFS) conducts quarterly surveys of employment and unemployment, we only have data as of June 2019. Even the high-frequency indicators available, such as the Inflation and the Industrial Production Index is launching with important gaps and warnings now. Without credible official data on the economy, policymakers will be groping in the dark. This will also avoid informed public debate. There are undoubtedly some alternative sources of data from private sector actors. But they cannot be substitutes for official statistics for two reasons. These databases are quite expensive. This significantly limits their access. They have not received as much academic scrutiny as their official counterparts and therefore cannot be taken at face value.
The government must realize that ensuring the publication of quality economic data is as important as monitoring health indicators during the pandemic. There are ways to do this. For example, the Reserve Bank of India could work with banks and payment companies to provide a geographic map of remittance flows before the pandemic. Phone companies should be asked to share information about SIM card movement patterns to give an estimate of reverse migration. Going public with input credit chains for goods and services taxes could give an idea of the value chain links and possible disruptions due to the blockade. But to start, the government should publish the National Office of Sample Surveys 2017-18 Consumer spending survey, which he had hastily scrapped last year. This is literally a click away.