The Hindu Business Line : Commerce Ministry defends trade data methodology

The Commerce Ministry has defended its current methodology of comparing provisional trade data with provisional data of the previous year and not provisional to provisionally revised or final data of the previous year, a practice it followed in the past seven years till 2005-06.

In a white paper on methodology for computation of growth rate for exports and imports it has put on public domain for comments on Thursday here, the Commerce Ministry said at the start of the last fiscal, trade data came under scanner in the wake of under-reporting of textile exports by India which did not match with higher export receipts to India on these items based on US and EU Customs figures.

Accordingly, the Directorate-General of Commercial Intelligence & Statistics (DGCI&S) in concert with DG Systems, Central Board of Excise and Customs, undertook the work of matching the data received by the DGCI&S in the Daily Trade Returns with the data entered into the DG Systems computer network (ICE GATE) from various Customs Houses all over the country.

After several months of study it was found that there were a large number of missing entries, i.e., data sent from the Customs houses through ICE GATE was not received by the DGCI&S. The aggregate magnitude of missing entries was valued at roughly $12 billion for 2005-06. By taking account of these missing entries, the textile data could be reconciled to a great extent with the data of the US and the EU Customs.

In this context, the Ministry paper said the monthly press release statement of merchandise trade brought out from 1999-2000 up to 2005-06 by the Department of Commerce had been comparing the first reported provisional trade data of the current period with the latest available provisionally revised data of the corresponding period of the previous year. However, in the wake of wide variations in trade data due to missing entries, it was found appropriate to revert to the earlier practice of comparing provisional data with provisional data of the previous year beginning this fiscal, while simultaneously also providing the latest provisionally revised figures of the previous year with a view to maintain comparability and transparency in the methodology adopted for data presentation.

When contacted the Commerce Secretary Mr S.N. Menon, told Business Line here that "export statistics is a problem and we are trying to streamline it through DGCI&S. We have put the discussion paper on the Web site and it is for different organisations to come up and tell us what should be done. If we have made mistakes we will correct it. The idea is transparency in governance and in the system".

Stating that the extent of variations in annual trade data from provisional to provisional and provisional to finally revised ranged from less than one per cent to more than five percent during the last five years, the paper said that as a result there is expected to be wide fluctuations in growth rate of exports. It said growth rates compared on the basis of incomparable, i.e., provisional data with provisionally revised data or previous year might lead to misleading results, especially if the extent of revisions is significant. Hence till such time as the trade data series stabilises completely (the present system of collection and compilation of merchandise trade data is in a transitional phase with 85 per cent data being captured under the Electronic Data Interchange), the Ministry maintains that it would compute growth rates on provisional to provisional basis while at the same time giving the latest available provisionally revised figures of last year for reasons of transparency and comparability.

More Stories on : Foreign Trade | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page