Alternative data sources help in 'proactive intervention' for growth: CEA

Business Standard

2 days ago

Alternative data sources arising as the 'byproduct of everyday digital interactions' can help policymakers in providing "proactive intervention" for economic growth, said V Anantha Nageswaran, India's chief economic advisor, on Thursday.
'It is important to note that the value of alternate data is not in its volume or novelty, but in the distinctive lens it offers,' he said at the National Workshop on Alternate Data Sources and Frontier Technologies for Policy Making. The two-day event in New Delhi is organised by the Ministry of Statistics and Programme Implementation (MoSPI).
'These data sources enable policymakers to move from retrospective diagnostics to proactive intervention. It captures emergent behaviour and reflects the lived experience of economic agents that conventional aggregates sometimes cannot.'
It is important that researchers understand the huge amounts of data that is being generated, as it helps in improving the forecast accuracy of economic aggregates such as consumption, gross domestic product and investments, said Nageswaran.
'For example, satellite-based night-time luminosity has been used to indicate economic activity in regions with delayed or weak statistical reporting. The satellite data can help policymakers detect cropping patterns, assess soil moisture, and detect early signs of drought. These insights can inform timely decisions on input provisioning, crop insurance payouts, and regional procurement strategies.'
Suman K Bery, vice-chairperson of NITI Aayog, told the workshop conventional data should be integrated with alternate sources while ensuring quality.
'The insights from traditional as well as alternate data sources need to be strengthened with emphasis on data processing and assimilation at the same time,' said Bery.
Saurabh Garg, secretary at MoSPI, listed five building blocks for enhancing harmonisation of data. These are meta data structures, international and national classifications, unique identifiers, self-quality assessment tools and reconciliation of diverse data to achieve such endeavours.
Nageswaran said data generated by statistical systems and alternate sources complement rather than substitute each other. The latest trends in technology, like artificial intelligence and Internet of things, have to go hand in hand with skilling manpower.