The NSO currently receives data on 4,000 companies from market regulator SEBI for the MCA21 database.
The Ministry of Corporate Affairs (MCA) is planning to widen the number of companies included while calculating gross domestic product (GDP), the Financial Express reported.
By amending the Companies Act, the MCA is planning to ask large unlisted companies above a certain threshold to submit results quarterly instead of annually.
The National Statistics Office (NSO) currently receives data on 4,000 companies from market regulator Securities and Exchange Board of India (SEBI) for the MCA21 database.
The MCA estimates that the move will help them get information on 30,000-40,000 companies every quarter.
Moneycontrol could not independently verify the story.
“A larger sample size will also reduce the fluctuations in estimates, especially when the economy goes through a structural change,” an official told the publication.
The MCA’s move comes amid criticism of India’s method of calculating GDP, which could possibly have led to over-estimation of the number. The MCA 21 database, too, was questioned earlier in 2019.
A National Sample Survey Office (NSSO) study released in May found that 38 percent of the companies in the database could not be traced or were wrongly classified.
Pronab Sen, the former chairman of the National Statistical Commission (NSC), told the paper that he was in favour of the plan.
“Any such move will certainly help. This is because usually when the full MCA21 data comes in, it gives a different picture than the one based on the data of just listed companies; this typically leads to a discrepancy between the quarterly and the final annual estimates,” Sen said.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Dec 11, 2019 11:17 am