The central government is facing a lot of criticism over the veracity of the economic data. Also, there are allegations of tampering with it. In such a situation, the Modi government is discussing a change in the way of official assessment of the economy. The fundamental issue of discussion is how to assess economic activities more accurately, especially the movements of disorganized areas. In this sequence, the process of changing the basis of estimation using state-of-the-art technology is also serious.

The government has taken this initiative after the NITI Aayog, the ministry of statistics and other government agencies suggested to correct some shortcomings to improve the quality of official data. For the last few years, the government has been facing political attacks on this issue. Opposition parties and some experts are skeptical of the high GDP growth figures in the Modi government.

Tips for plugging

Former Chief Economic Advisor Arvind Subramanian claimed that real GDP growth was 2.5% lower than the official figure. However, the criticisms did not get much force as the impact of the economic slowdown was also seen in the official figures and the question of Subramanian was raised. However, the government felt that it needed to seriously consider the official figure.

Difficulties in collecting data for service sector

For example, most services sector activities, which contribute half of the country's GDP, are basically measured on the basis of the output of formal sector institutions, while their scope is limited to a little over a quarter of the entire sector. Of the 11 lakh active Indian companies, seven lakh are from the service sector. The situation is even worse in sections such as transport and restaurants, as their economic activity is assessed based on data from barely 15% of institutions that are in the formal sector. Estimation of production in some regions such as sugar is dependent on the average production figure which is three decades old.