The Central Statistics Office will soon publish a revised calendar of releasing GDP data in line with the Finance Ministry’s plan to advance the Budget.
In an interview to BusinessLine , Chief Statistician TCA Anant said, “The manner of GDP compilation will also be improved with the improvement in the record system of the tax authorities under the goods and services tax (GST).”
Secretary, Ministry of Statistics and Programme Implementation, Anant said that the new indirect tax levy will also have an impact on the economy.
We have nothing to do with the Budget formally. We only give the Finance Ministry advance estimates.
The statistical methodology for computing the advance estimate is very similar to that for computing quarterly estimates. At the time of compilation of the advance estimates, we do not have the full accounting information. What we have is a variety of indicators, some are assessments done by companies, and some are provisional accounting data from the Controller General of Accounts.
There is a statistical procedure called benchmark indicator, where the earlier data or estimate is projected forward based on the indicators available. That’s what we do for the advance estimate and conceptually this can be done at any time. You can give a full year projection even now along with each quarterly estimate.
The reason why February 7 was chosen to announce the advance estimates of national income is because that was the latest the Ministry of Finance would wait before it needed to publish its Budget documents. If they want it one month earlier, we can do that also. That’s not a problem.
But will the accuracy suffer due to the advancement of the calendar?
The accuracy of any projection is based on the amount of data available. My estimate is more accurate at the end of the year than it is at the beginning of the year. It would be more accurate if I make it after 11 months than if I make it after 10 months of the year. So when I am making a projection for the full year using six months’ data, I will have one level of accuracy, and when I use data for seven months, I will have another level of accuracy. All projections have inherently a level of accuracy, which is based on the amount of data available. But that doesn’t impair the quality of the estimate.
Will the CSO’s data release calendar be revised?
We will now put out a fresh calendar and a profile of releases that will meet the requirements of the Ministry of Finance and also try and maintain the continuity of other users so that those who have built it into their models can also keep using it.
Will the roll out of GST boost the GDP, as has been projected by various estimates?
There are two ways of looking at it. GST as a policy will have real implications for the economy. GST will also help us to improve our GDP compilation.
It is well documented that taxes have a real effect on the economy. The GST is a significant change in the manner in which the government collects and distributes taxes and so it will influence the economy. People who have argued for GST have also pointed this out and there is a committee report on the issue as well.
GST will also help us to improve our GDP compilation, for which we use data from the tax administration as well. Apart from the tax payment, we also extract data from the returns files and for sectors like services and trade, this gives reliable information. So we also get information on the quantum of that activity. GST will look at value addition in all stages, which will all be captured in the administrative database. The records will show the full structure of transactions. I have not yet seen the GST network or the tax return forms, but for us, those forms and that database become a very important resource on looking at economic activities both on the production of goods and services.
Will the Central Statistics Office have to change their data collection system under GST?
Even now, we don’t collect the tax data. The tax department collects the data, which we take from them. But under GST, once we have the sense of the database we can also make requests for specific types of information. That’s what we are looking forward to. But all this will depend on the manner and structure of implementation of GST.
By when will the new series of Index of Industrial production be launched?
We are still in the process of getting approvals. It is hard to say by when it will be completed but we will launch the IIP once it is approved.