The Data Maze- An overhaul of the statistical system is urgent

Source: The post is based on the article “The Data Maze- It undermines economic policymaking. An overhaul of the statistical system is urgent” published in The Times of India on 27th September 2023.

Syllabus: GS3- Agriculture- Marketing of agricultural produce and issues and related constraints.

News: The article discusses concerns about unreliable agricultural data in India. Inaccurate farm output estimates affect decisions on imports, exports, and policy. Improvements are needed for informed policymaking, and technology like digital surveys and satellites may help in acquiring more accurate data.

What problems are caused by unreliable agricultural data in India?

Import Scrambles and Decision Making: Inaccurate agricultural data leads to urgent, last-minute decisions, like unexpected import needs due to underestimated domestic production, as noted by Finance Minister Nirmala Sitharaman.

Mismatched Output Estimates: The GOI’s wheat output estimate is about 10 million tonnes more than the market’s for 2022-23, illustrating the discrepancies in agricultural data.

Export Bans and Domestic Prices: Unreliable data has led to the imposition of export barriers on rice and wheat despite an increase in production, affecting domestic prices.

Impact on Farmers and Reputation: Export bans due to unreliable data have negative consequences for farmers and undermine India’s reputation as a reliable supplier.

Interest Rate Adjustments and Inflation: Inaccurate agricultural data complicates RBI’s job of adjusting interest rates to control inflation, leading to potential economic instability.

What steps are being taken to improve data reliability?

Pilot Digital Crop Survey: GOI has initiated a pilot digital crop survey in 12 states, focusing on enhancing the reliability of data on crop acreage.

Advancements in Satellite Technology: ISRO’s advances with satellites are being leveraged to possibly deliver more accurate and reliable agricultural data soon.

Emphasis on Real-Time Assessment: Finance Minister Nirmala Sitharaman has emphasized the importance of real-time assessment of likely yields of crops to avoid last-minute scrambles and make informed decisions on imports.

Why is there a need for updated statistical systems?

Accurate Policy Implementation: The delay in updating the census has impacted multiple data sets that rely on it for building samples, affecting the relevance of guidelines in schemes, like the allocation for women farmers.

Changing Business Models: With the consequential change over the last decade from traditional to digital models, there’s a pressing need to ensure that the statistical system and GDP base year are current and reflective of modern transitions.

Accurate Data for Decision-Making: Updated and reliable statistical systems are crucial for making informed decisions on imports, exports, and domestic policies.