Chennai: The International Monetary Fund has found that the data provided by India on national accounts, including GDP, GVA, consumption and expenditure, have “some shortcomings that somewhat hamper surveillance”.
IMF in its annual review on India’s national accounts, has given it a grade ‘C’ – the third one among the four grades.
It found that national accounts data are available at adequate frequency and timeliness and provide broadly adequate granularity. However, some methodological weaknesses somewhat hamper surveillance and warrant an overall sectoral rating for the national accounts of C.
Main methodological issues are related to coverage, including an outdated base year of 2011/12 and use of wholesale price indices as data sources for deflators due to the lack of producer prices indices, and excessive use of single deflation, which may introduce cyclical biases.
Further, IMF found that at times there are sizable discrepancies between production and expenditure approaches, that may indicate the need to enhance the coverage of the expenditure approach data and the informal sector, and lack of seasonally adjusted data and room for improvement of other statistical techniques used in the quarterly national accounts compilation.
On granularity, further breakdown of Gross Fixed Capital Formation by institutional sector, which is published with a significant lag, and further disaggregation of the quarterly production and expenditure approach estimates would allow for a more detailed analysis of economic trends.
Consumer Price Index is available at adequate frequency and timeliness. But, the rating granted to coverage reflects the outdated CPI base year, items basket, and weights (2011/12), implying that the CPI basket likely fails to accurately represent current spending habits.
On government finance statistics, the granularity of available data is broadly adequate, while coverage and timeliness can be improved. Consolidated central and state government fiscal data have not been published since mid-2019, covering outturns for FY 2015-16, and consolidated general government data, which would include local government and extrabudgetary funds, are not compiled.
The RBI publishes a limited set of consolidated fiscal aggregates with a lag of more than one year. Monthly data on fiscal operations for the central government and individual states are published on a timely basis, but consolidated fiscal accounts across all states are available with a long lag.
On the external sector statistics, coverage, frequency and timeliness are adequate, while granularity and consistency present room for improvement. Monetary and financial sector statistics are broadly adequate for surveillance, with scope for improvement in coverage and timeliness. There are limited data provided on NBFCs, households, and systemwide financial interconnectedness.