It doesn’t have any mechanism to collect data on production in the informal sector; it uses the data for the formal sector as a proxy. Demonetisation didn’t devastate the formal sector as much as it did the informal sector. There lies the first reason for the consumption numbers getting overstated. Read moreSecond, the production data on formal sector is based on the balance sheets reported by manufacturers. Unfortunately, the CSO can’t change its methodology on its own; nor does it have the wherewithal to assess the informal sector separately.

Source: Hindustan Times March 05, 2017 01:12 UTC