Mar 21, 2012

Services data - some efforts by GoI

The services data availability is an issue that is being discussed for some time now in the policy circles. The chapter on services sector in India in the latest economic survey acknowledges it. To quote it verbatim, section 10.18 reads:

"In last year’s Economic Survey, the weaknesses related to availability and quality of services data were highlighted. To reiterate, these are difficulties in compilation of an index of services sector production, non-representation of many service sectors in the calculation of the wholesale price index, limited availability of published data on pricing of services, and limited data on trade in services. Even where data are available, they suffer from deficiencies related to definition, method of collection, suitability for pricing, and construction of indices. The recent efforts in streamlining data in the services sector (Box 10.1), though welcome, need to be accelerated in a coordinated manner with the help of experts in the field."

And under Box 10.1, the relevant portion on trade data reads:

"Trade in services data: In the current system, the data on international trade in services are not available country-wise, at disaggregated level and as per W-120 classification needed for the General Agreement on Trade in Services (GATS) negotiations. The RBI has started releasing data on trade in services with a lag of 45 days from April 2011.
While the RBI has been providing data on services at a more disaggregated level in recent years, it has also started releasing disaggregated quarterly data on trade in services beginning the first quarter of 2010-11. Data availability in trade of some major services is as follows.
Data related to transportation services are derived from authorized dealers (AD) reporting under the Foreign Exchange Transaction through Electronic Reporting System (FETERS) purpose code. Currently, freight and passengers are not segregated but are clubbed together and shown according to the modes of transport in BoP statistics. Data related to travel are also derived in the same way with data on the receipts side being deficient while on the payments side they are adequate. The travel receipts for BoP are based on the Ministry of Tourism’s data on tourist arrivals. In India’s BoP, the telecommunication, computer, and information services category is presented separately under the heads communication, software, and news agency. Data on credits and debits under each category are also captured through FETERS. With regard to computer services, data are presented as software services and credit data are sourced from NASSCOM due to deficiencies in FETERS data. Data on the debit side of software services are from FETERS. The Survey on ‘Foreign Collaboration in India conducted and published by the RBI contains foreign affiliated statistics (FATS). FATS measure turnover, export and import of goods and services, value added, and employment of resident (inward) and non-resident (outward) affiliates of multinational enterprises. At present, under the guidance of an Expert Group on Strengthening of Institutional Mechanism for Regular Collection and Compilation of Data on International Trade in Services set up by MOSPI, two pilot surveys in international trade in services have been initiated—one for the health sector and another for education. The Expert Group will submit its final report after completion of these pilot surveys."

The above paragraphs show how the data is scattered and how mammoth a task it is for the department which decides to collect and collate the services data. However, the steps must be taken as the share of services in GDP as well as in foreign trade is going to only increase in coming days. Availability of good database is a perquisite for any analysis and  informed policy making.