Examine the significance of leveraging administrative data (GST, etc.) for economic statistics compilation in India.

Q. Examine the significance of leveraging administrative data (GST, etc.) for economic statistics compilation in India. (15 marks, 250-350 words)

Administrative data — records generated as a by-product of governance, such as GST returns, railway and aviation traffic, and banking or insurance filings — is emerging as a second pillar of India's statistical system alongside sample surveys. Its potential is best illustrated by MoSPI's Index of Services Production (ISP), base year 2024-25, which relies primarily on aggregated GST data for market-based services [2].

Filling critical data gaps - Unlike industry, which the IIP tracks monthly, the services sector had no high-frequency output indicator, creating a gap in assessing overall economic performance [1]. - Services form the largest share of GVA; the ISP proposes to cover sub-sectors from trade and transport to banking, telecom, real estate and professional services [1].

Timeliness and policy responsiveness - Administrative records arrive monthly and near-real-time, enabling nowcasting of GDP and sharper inputs for monetary and fiscal decisions. - The first trial ISP for April 2026 covers 19 sub-sectors, about 60% of the services sector, with trial release on 14 July 2026 [3].

Cost, coverage and respondent burden - Reusing existing tax and administrative datasets avoids costly fresh primary surveys and reduces compliance burden on firms. - GST's near-universal formal-sector coverage offers a census-like base, unlike sample surveys prone to sampling error.

Concerns the approach must address - Administrative data captures the formal sector only, leaving India's large informal services economy unmeasured — health and education are to be folded in only later [1]. - Tax data reflects turnover, not volume, requiring careful deflation; a Laspeyres volume index with GVA weights is proposed to address this [3]. - Confidentiality risks are real; MoSPI has clarified it will use only aggregated, not unit-level, GST data [1]. - Definitional mismatch between tax and statistical classifications demands continuous validation.

Administrative data therefore strengthens, rather than replaces, India's survey architecture. The prudent path is the phased, trial-first rollout the Technical Advisory Committee recommended — validating methodology against quarterly and annual datasets before regular publication [3]. Coupled with statutory safeguards on data privacy and gradual extension to informal segments, such data convergence can build a statistical system that is timely, credible and evidence-driven.

(~325 words)

Sources: 1. An Approach Paper to Compilation of the Index of Service Production (ISP) for the formal sector of the economy — PIB, MoSPI (27 April 2026) — absence of a services counterpart to IIP; sectoral coverage; health/education deferred; aggregated-only GST data 2. Index of Services Production — PIB Factsheet, MoSPI — ISP base year 2024-25 and reliance on aggregated GST data 3. FAQs on Index of Services Production – Trial Indices with Base Year 2024-25 — PIB, MoSPI — 19 sub-sectors/~60% coverage, 14 July 2026 trial release, Laspeyres volume index with GVA weights, phased trial-first rollout