State Capacity Initiative, Centre For Policy Research and Carnegie India
July 3, 2023
The statistical system of a country acts as its mirror. It generates the statistics that allow observers to see how well a country is performing on key socioeconomic parameters such as per capita income, inflation, poverty, life expectancy, and average years of schooling. In most countries, a single agency or a handful of agencies produce the bulk of official statistics. The work of these and other peripheral agencies is typically regulated by a national statistical office that ensures statistical standards are in line with international norms. The statistical system provides citizens an impartial view of the state of their country’s progress. It enables policymakers and investors to make informed decisions.
India’s official statistical system, as we know it today, began taking shape during the British Raj (1858–1947). Colonial efforts to develop the statistical system were driven by an imperative to track a key market for English products; hence, trade statistics were much more well-developed compared to statistics on domestic economic production or socioeconomic development. Several official committees suggested reforms to correct the lopsided development of the official statistical system in British India, but most of their recommendations weren’t implemented.
It was only after India’s independence in 1947 that a serious effort was made to revamp India’s statistical infrastructure. The globally renowned statistician P. C. Mahalanobis led this drive and was backed by Jawaharlal Nehru, India’s first prime minister. The Mahalanobis model of data collection relied largely on random sampling and inspired similar initiatives elsewhere in the developing world.
With Mahalanobis’s death in 1972, India’s statistical system lost a powerful champion who had ensured its relevance without compromising its autonomy. Other changes in the post-Mahalanobis era diminished the statistical system. Growing insularity, the lack of investments in computing resources, and the declining influence of the Planning Commission (which had earlier been a pillar of support for statisticians) eroded the statistical system’s effectiveness over time.
By the turn of the twentieth century, India’s statistical crisis had become too severe to be ignored. In early 2000, the central government appointed a high-level commission led by the former central banker C. Rangarajan to review the statistical system and suggest ways to improve it. Some of the commission’s recommendations were implemented but only in a half-hearted manner.
The modest reforms initiated in the wake of the Rangarajan commission’s recommendations failed to address the deep-rooted crisis the system faced. The development of the statistical system remained stunted, impacting the credibility of data releases.
Meanwhile, the political pressures on the statistical system grew as data assumed a major role in public discourse. A weakened statistical system failed to assert its autonomy in the face of such pressures. The past decade has seen a number of statistical controversies even as the statistical system struggled to reform itself.
Today, India’s statistical system faces a major crisis. Producers and users of official statistics have stated that the lack of a clear road map to address this crisis worries them as much as the crisis itself.
This paper argues that a Statistical Reforms Commission should be set up to address the roots of India’s statistical crisis. The proposed commission must outline the legal framework that would underpin a revamped statistical authority. In addition, this commission should frame a new statistical architecture that is able to meet the emerging needs of data users. It should prepare a national statistical strategy document after taking into account the concerns of all key stakeholders.
Without wholehearted reforms, India’s statistical system will fail to deliver the kind of high-quality, high-frequency datasets that Indian citizens, policymakers, and investors expect from it today.Publisher Page>