The Central Statistics Office (CSO) needs to rethink how it estimates the growth of the informal sector as the current method is no longer accurate, former Chief Statistician of India Pronab Sen said on Wednesday.
“Using the corporate sector data to estimate the activity in the non-corporate sector, as is being done, works only as long as the technologies being used in both sectors are reasonably similar,” Dr. Sen said while speaking at a session on GDP data organised by the National Council of Applied Economic Research.
“However, this is no longer the case,” he added. “Indian corporates, especially the large ones, have seen greater technology being used and this is not the case for the non-corporate sector. The CSO needs to rethink this.”
Dr. Sen further said that the data for the last few years showed that there was an increasing trend of companies using technology instead of labour.
“The data implies that there are many companies that are replacing many low-skilled workers with a few highly-skilled, highly paid workers,” Dr. Sen explained. “This is because they are using technology instead. All those people who are concerned about the future use of automation and its impact on labour, well, the automation is already happening.”
One way in which the CSO could better estimate the informal sector activity is to use employment data, he added.
Former Chief Economic Adviser Arvind Subramanian again highlighted his misgivings with the GDP growth data for the period 2011-12 to 2016-17.
He also said that India was well placed now to incorporate Goods and Services Tax data to arrive at an expenditure side estimate of GDP growth, something that has never been done in India.