Enhancing India’s Fiscal Prudence: The Power of Data-Driven Governance
India’s economic future hinges significantly on the fiscal discipline of its individual states. This crucial message was recently underscored by **Rao Inderjit Singh**, the Union Minister of State (Independent Charge) for both the **Ministry of Statistics and Programme Implementation (MoSPI)** and the **Ministry of Planning**. He emphasized that initiatives like the **Fiscal Health Index (FHI)**, which meticulously ranks states based on their financial standing, serve as a vital “policy nudge” – a powerful tool to encourage states to proactively reduce their **debt-to-Gross State Domestic Product (GSDP)** ratios. This comes at a pivotal time, with the central government itself targeting a substantial reduction in its overall debt-to-Gross Domestic Product (GDP) ratio from the 2026-27 fiscal year onwards. Minister Singh cautioned that any “fiscal slippage” by states could inadvertently jeopardize India’s sovereign risk profile on the global stage.
Modernizing Macroeconomic Indicators: A Leap Towards Precision
In a comprehensive interview, Minister Singh delved into MoSPI’s ambitious plans for more frequent and accurate revisions of key macroeconomic data series. The ministry is on track to release updated series for the **Consumer Price Index (CPI)**, **Gross Domestic Product (GDP)**, and the **Index of Industrial Production (IIP)** next year, signaling a significant modernization drive.
For **GDP**, the refreshed series, with 2022-23 as its new base year, is anticipated for release on February 27, 2026. Similarly, the **IIP** will transition to a 2022-23 base, with its revised series rolling out from 2026-27. The **CPI**, a critical measure of inflation, will see its base year updated to 2024. The basket of items and their respective weightages will be informed by the recently conducted **Household Consumption Expenditure Survey (HCES)** from 2023-24, with the new CPI series expected by the first quarter of 2026.
Beyond Traditional Surveys: Harnessing Diverse Data Sources
MoSPI is actively exploring innovative methodologies to enhance data accuracy and responsiveness. For the **IIP**, the ministry is experimenting with a chain-based compilation approach to better capture structural economic shifts. The selection of item baskets and factory frames for the new IIP series will leverage the latest data from the **Annual Survey of Industries (ASI) 2022-23**.
The **HCES** is foundational to the CPI base updates, and in a move to ensure ongoing relevance, MoSPI now plans to conduct this crucial survey approximately every three years, facilitating more timely CPI revisions. Furthermore, the ministry is embracing a forward-thinking strategy for CPI data collection, venturing beyond traditional methods. This includes leveraging alternative digital sources such as online platforms for airfare and rail fare, **Over-The-Top (OTT)** platforms, and administrative records for commodities like petrol, diesel, and LPG. Discussions are underway with key entities like the **Indian Railway Catering and Tourism Corporation**, the **Ministry of Railways**, and the **Petroleum Planning and Analysis Cell** under the **Ministry of Petroleum and Natural Gas** for direct data integration.
The future of data collection at MoSPI also involves the pioneering use of “scanner data” and “web scraping” to improve efficiency and comprehensiveness, with the potential inclusion of price data from e-commerce websites. For **GDP** estimation, while annual data from government expenditure and the private corporate sector are readily available, the challenge lies in the informal sector. MoSPI is diligently working to reduce the periodicity of surveys supporting these estimates, with the **Periodic Labour Force Survey (PLFS)** now monthly and plans for quarterly releases of **ASUSE** (Annual Survey of Unincorporated Sector Enterprises) data, following successful pilot projects for the **Annual Survey of Service Sector Enterprises (ASSSE)**.
Complementing existing data from the **Office of Controller General of Accounts**, **MCA-21**, and the **Reserve Bank of India**, MoSPI is now integrating modern digital footprints such as **Goods and Services Tax (GST)** data, information from the **E-Vahan portal**, and **UPI (Unified Payments Interface) transaction data** from the **National Payments Corporation of India**. This strategic diversification of data sources promises to enable more frequent **GDP** base revisions in the near future.
The FHI’s Crucial Role in National Economic Stability
Minister Singh affirmed that the **Fiscal Health Index (FHI)** rankings are instrumental in compelling states to reign in their **debt-to-GSDP ratios**. This becomes even more critical as the central government aims to reduce its overall government debt from the current 57.1 percent to 50 percent starting in 2026-27.
The **FHI** provides a granular assessment of Indian states’ fiscal performance, promoting transparency, accountability, and prudent financial stewardship. It evaluates states across four strategic pillars: **revenue mobilisation**, **quality of expenditure**, **fiscal prudence**, and **debt index and sustainability**. This multi-faceted approach offers a comprehensive snapshot of each state’s fiscal health, pinpointing areas of strength and concern, thereby laying the groundwork for tailored policy recommendations and supporting targeted fiscal reforms.
Beyond being a mere scorecard, the **FHI** underscores the profound importance of long-term financial sustainability. Fiscal discipline at the state level is not an isolated phenomenon; it forms a significant component of India’s overall debt sustainability. As states constitute a substantial part of the nation’s total fiscal position, their collective prudence is paramount for maintaining macroeconomic stability and mitigating debt risks at the central level. International investors and credit rating agencies, in particular, view India’s fiscal health holistically, making little distinction between the Centre and states. Consequently, any significant fiscal indiscretion by states could undermine India’s sovereign risk profile. The **FHI** offers a credible benchmark, showcasing sub-national fiscal discipline, which in turn boosts confidence among investors and agencies. With India transitioning to a **debt-to-GDP** anchor post-2025-26 and its inclusion in the **JPMorgan Emerging Market Debt Index** attracting substantial inflows (estimated at ~$8 billion), transparent metrics like the **FHI** are vital for aligning with global fiscal standards and bolstering investor sentiment. Ultimately, these public rankings create healthy competition, pushing weaker states to improve and emulate top performers, thereby acting as a powerful “policy nudge,” a reputational signal, and a strategic planning tool for state governments.
Strengthening MoSPI’s Foundation: Recruitment and Technology
Acknowledging historical challenges with understaffing, Minister Singh detailed MoSPI’s proactive steps to bolster its human resources and operational efficiency. The ministry has fully transitioned all its surveys to the **Computer Assisted Personal Interview (CAPI)** mode, an integrated digital platform that incorporates in-built validation, replacing the traditional paper-pen methodology. A significant boost came in May with the recruitment of 700 **Junior Statistical Officers** through the **Staff Selection Commission**, who will be posted across various Regional Offices of the **National Statistics Office (NSO)**. Furthermore, survey-specific contractual staff are now engaged, receiving multi-level training with a strong emphasis on data quality.
Evolving Poverty Measurement: The Focus on Multidimensional Deprivation
The release of the latest **HCES** data for 2022-23 and 2023-24 provides an updated view of consumption patterns across Indian households, sparking renewed discussions on poverty measurement frameworks. While Minister Singh noted that these remain technical and evolving subjects shaped by various considerations, including national priorities, he affirmed that the **National Multidimensional Poverty Index (MPI)** currently serves as a robust tool. The **MPI** offers granular insights into multiple dimensions of deprivation across all 36 States/Union Territories and over 700 districts, providing a comprehensive picture of poverty beyond mere income levels. The interview did not indicate immediate plans to update the historical **Tendulkar poverty line of 2009** or the **Rangarajan Committee line of 2014**.
Accelerated Surveys and Data-Driven Policymaking: MoSPI’s Tech Revolution
MoSPI has recently demonstrated remarkable agility in conducting surveys and releasing reports in a time-bound manner. This urgency, Minister Singh explained, stems directly from Prime Minister **Narendra Modi**’s vision for a tech-savvy, data-driven governance model. The Prime Minister’s emphasis on leveraging technology for efficient policy and scheme implementation, coupled with the need for accurate data to guide policy design, has propelled MoSPI’s transformation.
The shift from paper-pen data collection to tablets utilizing **CAPI** in the **National Sample Surveys (NSS)** has been a game-changer. **CAPI** incorporates in-built data validation and other survey administration features, significantly expediting data processing and finalization. Data can be collected both online and offline. Moreover, MoSPI has developed in-house software for critical tasks like data validation, multiplier calculation, table generation, and **Relative Standard Error (RSE)** calculation for the NSS. Pioneering applications of **Artificial Intelligence (AI)/Machine Learning (ML)** enabled chatbots have also been incorporated into surveys like the **Annual Survey of Unincorporated Sector Enterprises (ASUSE)** and the **CAPEX survey**. This technological leap has drastically reduced the time required for data dissemination post-survey. As a prime example, the Comprehensive Modular Survey: Telecom, conducted from January to March 2025, saw its results released in May 2025 – an impressive turnaround within two months. To further enhance transparency and user access, MoSPI has begun disseminating an advance Annual Release Calendar for all its statistical products on its website since 2024-25, allowing data users to anticipate and track data releases.
Collaborative Data Innovation: Engaging the Private Sector
MoSPI is proactively exploring the integration of alternative data sources into official statistics. To foster this, the ministry recently hosted a workshop focused on leveraging alternate data sources and frontier technologies for policymaking. This event saw robust participation from private sector partners, stakeholder ministries, and esteemed research institutions, providing valuable feedback. Further solidifying this collaborative approach, MoSPI has established a **Data Innovation Lab** dedicated to promoting innovation and adopting advanced **Information Technology** in official statistics. This lab actively involves private sector experts and renowned academic institutions in its endeavors.
The Future is AI-Powered: Transforming Statistical Systems
MoSPI is at the forefront of integrating **Artificial Intelligence** into its operations. Beyond AI/ML enabled chatbots already deployed in surveys like **ASUSE** and **CAPEX** (where an AI-powered chatbot assists respondents in self-compilation by guiding them through concepts via Natural Language Processing techniques), the ministry envisions a much broader role for AI. While traditional data collection methods like surveys and administrative data will remain foundational, AI is expected to significantly strengthen India’s statistical system. MoSPI is actively collaborating with startups and educational institutions on pilot projects through the **Data Innovation Lab** to develop AI-based tools for rejuvenating legacy data, enhancing chatbots, and improving classification processes.
MoSPI’s Pivotal Role in India’s Viksit Bharat 2047 Vision
Under the leadership of Prime Minister **Narendra Modi**, the government’s unwavering focus on data-driven policy decisions is central to improving the quality of life for Indian citizens. As the nodal agency for the integrated development of the national statistical system, MoSPI maintains regular interactions with stakeholder ministries and departments. By adopting modern technologies and ensuring the timely release of statistical products on critical aspects, MoSPI is playing an indispensable role in enabling data-driven decision-making across the government. This vital contribution is propelling India forward on its ambitious journey towards achieving the vision of **Viksit Bharat 2047**, an empowered and developed nation.
