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Institutions: Reserve Bank of India (RBI) | Ministry of Statistics and Programme Implementation (MoSPI)
RBI Deputy Governor Dr. Poonam Gupta delivered a speech emphasizing the vital role of timely and topical statistics in enabling agile monetary and fiscal policymaking, especially amidst high global uncertainty. The core message highlights that effective decision-making, such as rate cuts or targeted structural reforms, requires precise and current data that reflect the true state of the economy.
Dr. Gupta addressed public concerns regarding the accuracy of RBI’s inflation forecasts, asserting that there is “no systematic bias” in the central bank’s forecasting models and that forecast errors are a “global phenomenon”. She noted that the RBI employs a multifaceted approach, synthesizing robust econometric analysis with contemporary economic conditions and forward-looking sectoral perspectives.
The speech detailed significant institutional steps being taken to modernize India’s statistical infrastructure in collaboration with MoSPI:
Enhanced Frequency: The RBI is planning to release monthly Balance of Payments (BoP) data to provide more timely insights into the country’s external position, moving beyond the current quarterly system. The time lag for the quarterly BoP release has already been reduced from 90 days to 60 days.
Granular Flow Data: Data capturing the flow of financial resources to the commercial sector, including funds from non-bank sources (which now account for nearly half of total resources), external commercial borrowings, and foreign investments, will be made a monthly feature.
Statistical Upgrades: The RBI will benefit significantly from the forthcoming revision of national accounts and price statistics, with rebased GDP, CPI, and Index of Industrial Production (IIP) series expected from MoSPI soon.
The rebasing of the Gross Domestic Product (GDP) and the Consumer Price Index (CPI) is a major statistical exercise undertaken by the Ministry of Statistics and Programme Implementation (MoSPI). It involves updating the benchmark year used for calculating these indicators and reviewing the product baskets and weights (in the case of CPI). This ensures that the indices accurately reflect the current structure of the Indian economy (e.g., modern production techniques and current consumption patterns), making the data more relevant and reliable for macroeconomic and monetary policy analysis.
Policy Relevance
The commitment to monthly BoP and financial flow data represents a major policy step towards enhancing India’s external sector monitoring, which is critical given the recent volatility and geopolitical trade tensions. This focus on timeliness and granularity is essential for RBI’s Monetary Policy Committee to make agile, informed decisions, especially when navigating trade-offs between inflation control and growth support.
Relevant Question for Policy Stakeholders: How will the RBI ensure that the new monthly release of financial flow and BoP data is effectively integrated into the policy modeling frameworks to improve the accuracy of its inflation and growth projections?
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