As the government already holds a rich repository of administrative, survey, institutional and transactions data about citizens, it can merge them and generate multiple benefits, it said.
"As data of societal interest is generated by the people, it should be 'of the people, by the people, for the people'," the Economic Survey tabled in the Parliament on Thursday said.
Given technological advances in gathering and storage of data, society's optimal consumption of data is higher than ever. Alongside the decreasing cost of gathering data, storage costs have decreased precipitously.
The survey said that the cost per gigabyte of storage has fallen from Rs 61,050 in 1981 to less than Rs 3.48 today.
According to the annual document of the Finance Ministry, the private sector does a good job of harnessing data where it is profitable, and government intervention is needed in social sectors of the country where private investment in data remains inadequate.
Arindam Guha, Partner, Deloitte India said that use of data for public good is expected to be one of the cornerstones for new forms of public-private-partnerships.
With deregulation of most sectors in the economy, significant transaction-level data is also generated by private sector players in sectors like mobility (app cabs), banking & insurance, health etc.
"Incentivising the private sector to share this data with the government through suitable policy incentives can provide rich insights for futuristic policy formulation. Similarly, using this data to kickstart the innovation and start-up ecosystem in the country can be a win-win for start-ups as well as government," said Guha.
( With inputs from IANS )