Broadly speaking, there are two sources of statistical data-internal and external. Internal source refers to the information collected from within the organization. For example different organization and Government departments generate large volume of information. These informations relate production, sales, purchases, profits, wages, salaries etc. These internal data are compiled in basic records of the institutions. Compilation of internal data ensures smooth management and fit policy formulation of the organization. On the other hand, if data are collected from outside, are called external data. External data can be collected either from the primary (original) so or from secondary sources. Such data are termed as primary and secondary data respective.
Primary data are first hand informations. These informations are collected directly from the source by means of field studies. Primary data are original and are like raw materials. It is the most crude form of information. The investigator himself collects primary data or supervises its collection. It may be collected on a sample or census basis or from case studies.
Secondary data are the Second hand informations. The data which have already been collected and processed by some agency or persons and are not used for the first time are termed as secondary data. According to M. M. Blair, “Secondary data are those already in existence and which have been collected for some other purpose.” Secondary data may be abstracted from existing records, published sources or unpublished sources.
The distinction between primary and secondary data is a matter of degree only. The data which are primary in the hands of one become secondary for all others. Generally the data are primary to the source who collects and processes them for the first time. It becomes secondary for all other sources, who use them later. For example, the population census report is primary for the Registrar General of India and the information from the report are secondary for all of us.
Both the primary and secondary data have their respective merits and demerits. Primary data are original as they are collected from the source. So they are more accurate than the secondary data. But primary data involves more money, time and energy than the secondary data. In an enquiry, a proper choice between the two forms of information should be made. The choice to a large extent depends on the “preliminaries to data collection”.