How India Counts Itself
Administrative Data: GST, EPFO and UPI
How data generated by government systems like GST filings, EPFO payrolls and UPI payments are increasingly used to track the economy, and their pitfalls.
Government systems generate huge amounts of administrative data.
Examples
- GST collections and e-way bills: track trade and business activity.
- EPFO payroll data: new formal jobs.
- UPI transactions: digital spending.
- Vehicle registrations (VAHAN).
- Electricity demand.
- Railway freight.
Advantages
- Timely: available monthly or even daily.
- Large: covers millions of transactions.
- Cheap: already collected.
Nowcasting
Economists use such data to nowcast: estimate current economic activity before GDP data arrive.
Pitfalls
- Coverage changes: EPFO growth may reflect formalisation of existing jobs, not new jobs.
- Policy changes: GST rate cuts affect collections.
- Behavioural shifts: UPI growth reflects cash-to-digital switching, not just more spending.
- Informal economy underrepresented.
The payroll debate
When EPFO data were promoted as job numbers from 2018, economists noted they included workers moving from informal to formal, making them imperfect job-creation measures.
The UPI boom
UPI transaction value grows rapidly. Part reflects more spending, but much reflects people switching from cash to phones.
Thinking administrative data directly measure economic growth
Coverage and behaviour changes can distort them.
Key takeaways
- GST, EPFO and UPI data track the economy in real time.
- They are timely, large and cheap.
- Coverage and behaviour changes can mislead.
- EPFO data reflect formalisation as well as new jobs.
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