Mind the statistics gap (Consumption expenditure and GDP data gap)

Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!

 Mind the statistics gap (Consumption expenditure and GDP data gap)

---

Read more on - Polity | Economy | Schemes | S&T | Environment

---

• Growing divergence: There are two major sources of data on consumption in India - the NSO-NSS survey data, and the NAS data. In no country do the consumption figures tally exactly, but in India, the gap has widened from 10% in 1970s to 68% in 2017-18.  (by 'consumption' is meant aggregate private consumption expenditure)
• [NSS - National Sample Survey, NAS - National Accounts Statistics, used to measure GDP]
• GDP growth and consumption: The generally lower GDP growth rates in the post 2011-12 period, and the low agricultural growth meant that rate of poverty decline would be low. Recent 5% and 4.5% rates also indicated the same.
• Strange observation: Per capita incomes have grown continuously (due to positive GDP growth rates). But the leaked NSS CES 2017-18 showed that real MPCE dropped from 2011-12 to 2017-18, by 3.7 per cent. How is it possible?
• [CES - Consumption Expenditure Survey, MPCE - Monthly Per Capita Expenditure]
• Top more than bottom: The CES showed that the top decile saw a 17.4% drop in real mean consumption from 2011-12 to 2017-18. Poverty headcount went up from 31.2% in 2011-12 to 35.1% in 2017-18. Inequality went down from 28.7 to 25.8.
• Alarming gap: The NSS data varies hugely from the corresponding NAS data, on consumption parameter. In  late 1970s, the difference was 10%, and today it is 68%.
• Explaining this gap: Poverty estimates in India by Prof DT Lakdawala referred to the size-distribution of private consumer expenditure based on NSSO methods. It was used by S Tendulkar also, despite the NSS-NAS data gap. It was then used by C Rangarajan committee also, as they were unable to explain the gaps.
• The data:

1. As per NAS, PCE went up from Rs.49 trillion in 2011-12 to Rs.74 trillion in 2017-18. That's a 51% rise. 
2. Per Capita consumption expenditure went up by 41%.
3. As per NSS-CES survey, per capita consumption expenditure went down by 3.7%. 

• Road ahead: The govt. must release the report now, and let researchers find the reasons for the huge discrepancy. Find the reasons, and get another survey done.
• Summary : The massive gap in consumption expenditure figures between NSS and NAS data needs deeper examination.

Read more on - Polity | Economy | Schemes | S&T | Environment

Join UPSC Self Prep course | Online Course (PT Gurukul)  | Covid Special Course | Join PT courses

* Content sourced from free internet sources (publications, PIB site, international sites, etc.). Take your own subscriptions. Copyrights acknowledged.