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Is legislative recognition the panacea for NSC's current state of affairs?

C Rangarajan, who headed a panel on whose recommendations the National Statistical Commission (NSC) was set up in 2006, has called for according legislative recognition to the Commission to clearly specify its role and functions. NSC was set up through an executive order. 

Will the legislative recognition clear the mess that NSC is currently in? 

The answer is no, if the draft Bill on NSC is taken into consideration, feel experts. The draft Bill was put in the public domain in December 2019.

"I agree that it (NSC) should be given a legal status, but what I disagree with is the proposal that has been made," said Pronab Sen, who had headed the Council.  

Elaborating, he said the draft Bill makes it an entity outside the government by incorporating it as a Section 8 company. Such companies are basically non-profit entities.  

"Having spent a lifetime in the government, I know that no government officer takes anything from outside the system seriously," said Sen, who has worked in various fields in the government, including as chief statistician and member of the erstwhile Planning Commission. 

He said nobody would recognise this kind of NSC. 

"It has to be embedded with the government, much in line with the Chief Information Commissioner (CIC). That should be the model. Look at the CIC's powers. He can suspend the secretary of the ministry if he does not comply with his order," Sen elaborated. 

Currently, the NSC chairman holds the position of minister-of-state rank. "In the government, that rank means a lot," Sen said.

But, that cannot be given to a Section-8 company, just as it cannot be given to a public sector entity, Sen explained. 

In fact, Sen had suggested that NSC be given legislative status but should reporting to Parliament like the Comptroller and Auditor General of India (CAG) and CIC.

But does setting it up through an executive order come in the way of its autonomy? 

Sen said it depends on how the government views the body. 

"You know the Planning Commission had so much power, yet it was set up through an executive order. Everything depends on how seriously the government takes it," he responded. 

When asked if he faced any instances when the NSC's recommendations were not accepted during his tenure as chairman, Sen said that would always happen. 

"The views of the bureaucracy, that is MoSPI, would be very different. They should be, because otherwise having NSC does not make any sense. NSC is there as the conscience keeper. If it feels MoSPI is doing something which it believes is wrong, then it is its job to step in," Sen pointed out. 

Rangarajan had said there should be a convention that the government accepts the NSC's recommendations.

He had cited the example of the finance commission to buttress his point.

However, Sen said not all of the recommendations of the finance commissions have been accepted by the government. 

P C Mohanan, who had quit NSC as its acting chairman last year over the issue of it being sidelined by the government, said legislative recognition gives certain authority to NSC, but it depends on what the provisions in the legislation concerned are.  

"Mere legislation will not help it if you make NSC just a recommendatory body. It requires a strong structure that is built in the legislation. The draft bill is the watered-down version of what Dr Rangarajan had recommended," he said. 

He said NSC should be given financial power and autonomy to work independently. 

"Currently, it works like an appendage of the MoSPI. It has to draw the staff, money from the ministry. If you establish a commission with financial power,  that will give it autonomy," he said. 

Even as a recommendatory body, if it has highly reputed people and the necessary authority and autonomy, then the government can't ignore it. 

On Rangarajan's view that a convention be established for the government to establish NSC's recommendations, Mohanan wondered how one would establish that convention.

"The convention has to be real. Finance commissions have from the beginning been headed by highly reputed people whose recommendations cannot be ignored. NSC should also be headed by such people," he said. 

When reminded that NSC was also headed by reputed people like Sen and he himself, he said, "But we did not have autonomy or financial powers. If we wanted to set up even a committee, it was for the ministry to approve it." 

Autonomy for NSC assumes significance as there have been criticisms of new GDP methodology as many say that the numbers arrived at do not correspond to the real economic performance. 

Sen said if someone criticises the methodology, it does not become wrong. 

"The debate should  be there, but somebody has to take a final decision. The new methodology of GDP was approved by NSC," he pointed out.

But does it need another overhauling because many say the numbers don't match the real economic performance? 

To this query, he said all these issues can be raised and these issues can be debated upon. "Because somebody is raising it, and you are saying that guy is right. That is not necessarily correct. Revisiting the methodology is the ambit of NSC. And if NSC says that the methodology is correct, it should be the end of the story."

Mohanan said NSC had earlier appointed two or three panels which went into issues of the real sector. "These panels made really good recommendations. But their recommendations are pending with the government," he said. 

He said the concept and methodology of computing GDP are all well known, but the crucial thing is how do you get the data, how do you analyse it.

For instance, he said the GST data is a very important source  but it has not become part of the national statistics because of various reasons. 

There has been criticism of the official statistics ever since the MoSPI came out with a new methodology to estimate the gross domestic product (GDP) on the base year of 2011-12 compared to the earlier 2004-05.

Even on the recently released GDP data for the fourth quarter and for the entire 2019-20, economists have raised doubts over the quality  of data. 

The data showed that GDP growth crashed to a 69-quarter low of 3.1 per cent in Q4 of 2019-20. State Bank of India (SBI) group chief economic advisor Soumya Kanti Ghosh had said the loss in Q4 because of the lockdown may have been evenly distributed across quarters. He estimated that Rs 1.18 trillion loss was distributed across quarters in FY20 and Q4 accounted for only half.
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