Context: The International Monetary Fund (IMF) has graded India’s national accounts and GDP statistics with a ‘C’ rating in its Data Quality Assessment Framework (DQAF). This is the second-lowest rating, raising scrutiny over the credibility and consistency of India’s economic data.
What is IMF’s DQAF?
The IMF evaluates country statistical systems based on:
- Methodological soundness
- Accuracy and reliability
- Serviceability
- Accessibility
- Transparency
Countries are graded from A to D, where A indicates internationally high-quality systems and D signifies serious concerns. India’s C rating implies data quality concerns but also ongoing reform efforts.
Why the Rating Matters
- Global Credibility: Investors and sovereign agencies use IMF-validated data to assess market confidence and capital flows.
- Policy Accuracy: Faulty data risks misjudgment in welfare targeting, inflation estimation, and fiscal planning.
- Growth Narrative: India’s high-growth claim requires data integrity to maintain international trust.
A robust statistical framework is vital for India’s ambition to remain the world’s fastest-growing major economy.
Key Issues in India’s National Accounts
- Enterprise Database Limitations
Reliance on MCA-21 corporate filings is problematic due to incomplete or delayed reporting. Only around 65% of registered companies regularly submit comprehensive financial data. - Informal Sector Under-Representation
Despite contributing over 45% of Gross Value Added (GVA), estimates are based on outdated ratios rather than real-time surveys, leading to under-capture of economic activity. - Survey and Data Release Gaps
Delay and discontinuity in major surveys — such as the non-release of the 2017–18 Consumer Expenditure Survey — weakens consumption and employment estimates. - Outdated Base Year
The base year of 2011–12 does not account for digitisation, platform-based services, and post-pandemic structural shifts — causing inaccuracies in GDP deflators.
Government Efforts and Reforms (Ongoing)
- Greater use of administrative and GST datasets to improve data coverage
- Expansion of Periodic Labour Force Survey (PLFS) and Household Consumption Surveys
- Work initiated to shift the base year to a more recent period
These reforms are expected to enhance transparency and policy credibility.
Way Forward
- Survey Modernisation: Adoption of digital data systems and continuous field tracking to capture real-time economic activities.
- Integrated Data Ecosystem: Linking of tax, corporate and labour databases for comprehensive economic mapping.
- Statistical Professionalism: Strengthening institutional autonomy of the National Statistical Commission.
- Alignment to Global Standards: Adopting UN-SNA 2008 norms for updated national accounts methodology.
Conclusion
India’s economy is witnessing strong growth momentum, but the quality of underlying data must match its aspirations. Strengthening statistical credibility is essential for effective policymaking, investor confidence, and safeguarding India’s economic reputation in global forums.