All firms may have to divulge business data

Companies that have been reluctant to share their production and sales data with the government for calculation of various indices will now be forced to do so.

According to the Collection of Statistics Bill, 2007, which was recently approved by the Cabinet and proposes to repeal the Collection of Statistics Act, 1957, the Central Statistical Organisation will be given more teeth to deal with the data inadequacy arising out of non-cooperation from companies.

This will make the data used for calculation of gross domestic product and other key macroeconomic indices like the index of industrial production (IIP) more comprehensive and more representative.

Under the new Bill, the Central Statistical Organisation (CSO) will specify the data format and periodicity of data disclosure which the companies will have to comply with. If they don't, the CSO can take the matter to a first class magistrate.

"If the magistrate finds it to be a case of wilful default, then he can impose a fine on the company. However, by paying the fine the company cannot absolve its responsibility from filing the data. The fine will be compounded on a daily basis until the data is filed," the chief statistician of India, Pronab Sen, told Business Standard.

Sen said even big corporate houses sometimes give data two years after it is asked for.

"So, for all practical purposes, we have to meet the information gap through surveys. At present, we don't have enough teeth to compel them to give information. The new Bill if passed in its present form will help us to get relevant data in time," Sen added.

In most countries, the data is not collected by the government rather companies file data returns regularly.

An economist well acquainted with the problem said companies were unwilling to disclose volume and sales data due to strategic reasons.

"They are reluctant as they apprehend the data may find its way into their competitor's hand. This has made all the major indices completely unrepresentative of the real situation. The index of industrial production is calculated using only the public sector unit data as private sector manufacturing companies do not share their data. As a matter of fact, I know that the major consumer non-durable companies never share their data with the government. This move will at least make the major indices relevant," he added.