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Informist, Thursday, Jun. 5, 2025

 

MUMBAI/NEW DELHI – Policymakers must look at "intelligent integration" of alternative data with official statistics as this new-age data provides a distinctive lens and enables proactive intervention and decision making, Chief Economic Adviser V. Anantha Nageswaran said at an event in the national capital.

 

Nageswaran said alternative data sets such as Unified Payments Interface transactions can provide insights into consumption patters, the urban-rural penetration and divide, and even sectoral shifts in expenditure. Online job positing provide insights into labour demand and consumption sentiment, offering forward looking indicators that compliment slower, backward looking official releases, Nageswaran said.

 

"It is important to note that the value of alternative data is not in the volume, but in the distinctive lens it offers," Nageswaran said at a workshop organised by the statistics ministry and NITI Aayog on using alternate data sources and frontier technologies for policy making. "These data sources enable policymakers to move from retrospective diagnostics to proactive intervention."

 

Ministry of Statistics and Programme Implementation Secretary Saurabh Garg had previously said the statistics ministry was looking to incorporate alternative sources of data in official statistics. The use of e-commerce data in the compilation of the CPI is a "work in progress", Garg had said at an event on Feb. 13. The ministry is also looking to incorporate alternative data such as goods and services tax into national accounts as part of the new GDP series which will be released in February with 2022-23 (Apr-Mar) as the base year.

 

Nageswaran said satellite data can help policymakers monitor cropping patterns, assess soil moisture and detect early signs of drought or pest-related stress. "These insights can form timely decisions on input provision, crop insurance payouts, and regional procurement strategies," he added.

 

"It (alternative data) encapsulates emergent behaviour, responds faster to shocks, and reflects the lived experience of economic agents in ways that conventional aggregates sometimes cannot," he said. "However, this is not an argument for replacement, it is one of intelligent integration."

 

The mature approach to integration of alternative data with traditional official statistics is to design systems where each informs and validates the other, especially in environments where timely action is crucial, Nageswaran said.

 

He said the challenge ahead is to institutionalise mechanisms that validate, integrate, and govern the use of alternative data responsibly, ensuring that they inform decision making without compromising privacy, equity, or statistical integrity. Further, an increase in dependence on alternative data will also lead to higher need for people who can make sense of the alternative data, he said.

 

Nageswaran also spoke of frontier technology and how artificial intelligence and machine learning can help discern patterns in vast unstructured data. Machine learning algorithms can be particularly valuable in agriculture, disaster management and environmental monitoring, he said. "If alternative data expands the canvas of what we can observe, frontier technologies determine how we observe, interpret, and act upon this observation."

 

Suman Bery, vice chairperson, NITI Aayog, said there is a need to use more technology-aided data. "We need to know what to measure and why to measure it. Some directional sense on where the economy is moving for real time interventions, I think is very valuable, without that being necessarily definitive," Bery said at the event.

 

World Bank Country Director for India Auguste Kouame said national statisticians and researchers should be given a free hand in using alternative data while upholding the statistical standards. "...They will also increase the capacity of policymakers and third we need to build and nurture advanced data scientists and data science capabilities and foster collaboration with institutions in academia and with the private sector as well," Kouame said.  End

 

Reported by Shubham Rana and Priyasmita Dutta

Edited by Akul Nishant Akhoury

 

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