Services contribute a little over 60 per cent to India’s gross domestic product, but there is no separate index to calculate these. The government has now decided to come out with an Index of Services Production (ISP). To begin with, the ministry of statistics and programme implementation (Mospi) has asked for feedback on a methodology to calculate air and rail traffic indices. T C A Anant, chief statistician and secretary, Mospi, tells Dilasha Seth and Sanjeeb Mukherjee it is a big challenge to measure the sector and come up with regular data. Edited excerpts:
When will you be able to come out with a full-fledged ISP?
What we have are partial indices for air and rail traffic. The services sector is heterogenous, covering a wide array of activity. The technical advisory group has studied, topic by topic, what type of data is available. However, it will take a while for a full-fledged index. The challenge is to capture the unorganised sector.
How do you plan to do so, even in the Index of Industrial Production?
The index for micro, small and medium enterprises may cover unorganised manufacturing as well. We have asked experts to explore this possibility, the only problem being how to get consistent data flow. The organised sector is subject to a legal reporting rule, covering large manufacturing companies. With services, however, it is a challenge to get systematic data.
What kind of problems do you envisage in calculating the ISP, at least initially?
The problem is that even the organised services in India do not have a specific time frame for data. It is unlike manufacturing, where you have the Factories Act, subjecting the industry to a slew of reporting and regulation mechanisms. But organised services, like business process outsourcing units, do not fall under the Factories Act.
However, we are exploring possibilities in the form of building a Business Register. It will be linked to the next economic census. It is expected to be compiled by 2014.
Once you launch the ISP, do you envisage further problems?
The challenge will be both getting the initial database and regularly updating the data.
When can we see initial indices?
Looking at air and rail, we have used past data for two-three years. We have put it in the public domain, to invite comments and suggestions. If it is feasible, we may consider bringing out these numbers on a regular basis. If the general feeling is that these are positive set of numbers to use, then we will release air and rail numbers at least, on a regular basis.
Can’t the numbers be at least released on a quarterly basis initially, if not monthly?
The quarterly estimates of value added in services are anyway available in the quarterly GDP figures, for banking, real estate, telecommunication, etc. But that, too, comes with a lag of two months. So, releasing quick monthly numbers is a big challenge.
