Reserve Bank of India (RBI) should consider publication of an average holding of cash reserves by commercial banks during the reference period. Data on actual cash reserves and liquidity amounts, excess cash reserves and liquidity investments, corresponding net demand and time liabilities (DTL) amounts, and the ratios of required, actual and excess cash reserve ratio (CRR) and statutory liquidity ratio (SLR) should be published. This is because a major component of the reserve money is the bankers’ deposits with RBI, essentially arising out of CRR prescribed for the banks. The banks are, however, allowed the flexibility to maintain CRR on an average basis during a fortnight with the restriction that the CRR on a particular day could be maintained at as low as 50 per cent of the required level for the first seven days of the reporting fortnight and 65 per cent for the rest of the fortnight. The reserve money data at a particular point of time, therefore, may not reflect the sharp changes in the component of bankers’ deposits with RBI.
Since there are differing perceptions on the concepts of monetary aggregates, RBI should publish a time series on components of money at a disaggregated level so as to enable analysts to construct their own series.
The data on the new monetary aggregates are available on a monthly basis since April 1993. RBI should consider extending this series backwards with a view to providing a longer time series, which would facilitate empirical studies.
Banking Statistics (Para 10.2.21)
Data on residual maturity of term deposits with the commercial banks should be collected and published by RBI. This will help in understanding the maturity profile of liabilities of commercial banks, its transition over time and the causal factors determining such changes.
The data on inter-bank cheque clearances should be given separately by the RBI.
In view of the need for consistency in the National Statistical System, RBI should maintain uniformity in the classification of occupation in borrowal accounts in Basic Statistical Returns (BSR) in conformity with National Industrial Classification (NIC) 1998 of CSO.
The coverage of data under the BSR system presently collected on electronic media (floppy) from the public sector banks (PSBs) should be extended. The PSBs should be encouraged to report data to RBI on-line, which would further reduce the time lag in processing and disseminating statistics based on the BSR system. The estimates based on sample surveys under the BSR, should include information on their statistical credibility such as standard errors.
Locational Banking Statistics (LBS) and Consolidated Banking Statistics (CBS) on international claims of banks should be compiled and published by RBI as early as possible.
Regional Rural Banks (Para 10.2.26)
The delay in collection of data from the Regional Rural Banks (RRBs) should be eliminated by concerted efforts made by RBI, NABARD and RRBs.
Co-operative Banks (Para 10.2.32)
The NABARD should consider different methods of collecting data to reduce the time lag. The basic strategy should be to differentiate among higher tiers as well as to differentiate larger co-operatives from the large number of smaller ones. Data from the former should be prompt and regular while for the latter a suitable system should be designed. The differentiation between the scheduled and non-scheduled co-operatives can also be useful for quick data collection and dissemination.
The NABARD should adopt a suitable sample survey to collect data from primary rural co-operative societies, (which are large in number) as it becomes difficult to collect data from all such co-operatives at frequent intervals.
The balance sheet of the co-operative banks should be standardized to a form, similar to that of commercial banks by RBI and NABARD.
Financial Institutions (Para 10.2.38)
Term-lending (IDBI, SIDBI, IFCI, etc.) and refinance institutions (NABARD, NHB) should furnish data promptly on a monthly/quarterly basis. To facilitate prompt release of data, a revision of the existing returns should be undertaken and an increased frequency in reporting stipulated by RBI and IDBI concertedly on an urgent basis.
The accounting years should be synchronised for all financial institutions.
The RBI, in consultation with IDBI, should introduce necessary returns from Financial Institutions (FIs) for compilation of liquidity and other financial aggregates.
The RBI should undertake the task of institutionalising the reporting system of all the NBFCs on an urgent basis. Accordingly, an appropriate reporting system should be devised for different categories of NBFCs. With regard to companies, which are, both registered and regulated by RBI namely, deposit-taking companies, periodical returns should be collected, consolidated and data disseminated on a systematic basis. The data coverage and timeliness for large companies should be on par with banking companies. There are NBFCs, which are registered with the RBI but are not regulated since they do not accept deposits. Information in respect of these companies should be consolidated and disseminated. There are several other companies which are registered under the Department of Company Affairs (DCA) and do not come under the jurisdiction of RBI and with respect to such companies, the information should be classified, consolidated and disseminated on the basis of their Annual Reports.
RBI has been collecting certain information through their surveys on growth of deposits with non-banking companies (now replaced with system of returns in case of deposit-accepting companies), which covers comprehensively different aspect of their operations. The RBI should analyse the complete set of data collected through these returns and publish comprehensive data on asset and liabilities, income and expenditure of all reporting companies, besides the analysis of public deposits as is being published at present. The details should also be presented by type of financial companies in collaboration with DCA.
A one-time census of NBFCs covering all companies incorporated with DCA should be conducted. The census should collect data on important activities, especially assets and liabilities and income and expenditure. A periodic sample survey should be conducted by the RBI for updating population estimates for NBFCs.
The RBI should continue the studies on financial and investment companies, till the system suggested above gets stabilised.
The National Sample Survey Organisation (NSSO) should continue to conduct the All-India Debt and Investment Surveys (AIDIS) at decennial intervals. The coverage of the AIDIS needs to be improved by pooling the estimates of Central and State samples on the one hand and by increasing the sample size on the other. It is necessary that the RBI and the NSSO should have a close collaboration in the conduct of AIDIS.
The Central Statistical Organisation (CSO) should conduct Enterprise Surveys separately for financial service enterprises and provide data needed to derive value-added details as also the details of credit. The RBI should closely liaise with CSO and NSSO on the technical aspects of these surveys and ensure the coverage of all known household financial enterprises like, share brokers, multani shroffs, chettiars, marwari kayas and pawnbrokers and various kinds of moneylenders.
The details collected under various returns of RBI, in particular Basic Statistical Return–1 (BSR-1) and Basic Statistical Return–4 (BSR-4), should be tabulated against the informal financial sector to understand the extent of linkages between the formal and informal segments.
Financial data in respect of all Non-Governmental Organisations (NGOs) and Self-Help Groups (SHGs) involved in micro financing should be collected. It is suggested that a sample survey of NGOs and SHGs should be undertaken by NABARD at quinquennial intervals. NABARD should also prescribe a half-yearly return to be submitted by all NGOs and SHGs.
Apart from nation-wide surveys, which provide macro estimates, it is necessary to promote regional and micro-level studies on the informal financial sector activities considering the diversity across the regions.
Insurance Statistics (Para 10.4.17)
Information pertaining to the insurance sector should be collected and disseminated by Insurance Regulatory Development Authority (IRDA). Income, expenditure, assets, liability, sources and uses of funds, investments, term structure, non-resident operations of insurance companies, etc. should be the major items of information. IRDA should establish a Research and Statistical Division for this purpose, rationalise existing returns and introduce new returns to collect necessary data.
The data should be consolidated by different categories of insurance, e.g. life, non-life, reinsurance, pension and super-annuation, health, crop, others.
In respect of Postal, Employees State Insurance, Army and other group insurance schemes, pension and super-annuation, essential information should be collected by IRDA and published.
Break-up of data by State, sector (rural-urban), ownership of insurance business, gender and occupation classification of policy holders, etc. should be published.
Primary Market (Para 10.5.5)
The Securities and Exchange Board of India (SEBI) should disseminate statistics on: (a) Resource mobilisation in the primary market by various categories of entities (non-Government Public Limited Companies, Banks, Financial Institutions (FIs), Government Companies (PSUs) and various categories of investors (ownership pattern of capital raised), (b) Data on firm allotments to institutional and other investors, (c) public subscriptions, (d) bond issues divided as between public issues and private placements, (e) actual mobilisation of funds through bonds, (f) Data on underwriting, and (g) Cost of issues.
The SEBI should undertake a comprehensive survey (as was done by the RBI in the past) on public response to equity capital issues – size-wise, occupation group-wise, region-wise.
Private Placements (Para 10.5.10)
The Securities and Exchange Board of India (SEBI), being a regulatory authority, should collect, compile and disseminate data on equity and debt on private placement, as a significant part of private placements are being listed on the stock exchange through subsequent processes. The system of data collection should be urgently formalised by SEBI along with disclosure norms for the private placement market. Pending such formal regulation through further amendments to the Companies Act, SEBI should stipulate certain listing requirements.
The banks, Financial Institutions (FIs) and NBFCs investing in privately-placed issues should periodically furnish details to RBI, such as amount invested, maturity period and credit rating of the instruments, rate of interest, etc. This would help in widening the coverage of data available with RBI for the purpose of processing and maintaining continuity in disseminating data on private placement.
Secondary Market (Para 10.5.22)
The Securities and Exchange Board of India (SEBI) should provide estimate of an all-India market capitalisation at regular intervals.
SEBI should construct divergence indices for the two main stock exchanges in the country, Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), to bring out the extent of arbitraging opportunities that exist after taking into account the cost differences in operating in the two exchanges.
Trades and Quotes (TAQ) data set should become available for all exchange-traded products, such as shares, bonds and derivatives. SEBI should ensure that a standardised data set is obtained and disseminated by each exchange every day.
The reporting of trade data on bonds should be made mandatory by the RBI for Government securities and by SEBI for corporate bonds and that such reporting should take place within the stipulated period. The NSE should ensure time-stamp of the data.
Secondary Market (Para 10.5.22)
The Securities and Exchange Board of India (SEBI) should consider widening the coverage of mutual funds operations to include: (a) Resource mobilisation by individual mutual funds, (b) Deployment of funds by mutual funds, (c) Resource mobilisation by offshore mutual funds, (d) Resource mobilisation by type of schemes (i.e., open-ended or close-ended) and by objective of scheme (i.e., income, growth, balanced, tax-saving), (e) Net resource mobilisation by Mutual Funds during the month, (f) Ownership of the units of Mutual Funds, and (g) Liabilities and assets, and income and expenditure accounts of the mutual funds.
Capital Market Related Institutions (Para 10.5.30)
SEBI should be the Central agency for collection and dissemination of data from all institutions that are under its control and jurisdiction.
SEBI should also bring out consolidated data of share brokers and share-broking firms in the organised sector in respect of their income, expenditure, volume of transactions and sources and uses of funds.
RBI should evolve a statistical system for collection of statistics from institutions for electronic funds transfer, payments through credit or debit cards in the market and the total volume of such transactions.
Government Securities Market (Para 10.6.8)
Data on ownership pattern of Central and State Government securities are released on an annual basis for a broad category of investors. However, no data on ownership pattern are disseminated on a quarterly/monthly basis. Therefore, monthly/quarterly data with wider coverage should be made available.
The maturity profile of outstanding State Government loans are not released, though such data, for the Central Government are released annually. Therefore, the outstanding market loans of the Central and State Governments separately, scrip-wise, as well as aggregate year-wise, should be released regularly on an annual basis.
There are areas where dissemination of market borrowings of State Governments is not at par with that for the Central Government. This gap needs to be bridged. First, data on Central Government market borrowings, budgeted and actuals and gross and net, are released regularly on a weekly, quarterly and annual basis. However, such data are not available for State Governments. Hence, details of market borrowing programmes of State Governments, allocations and actuals, auction and pre-announced coupons should be released regularly, preferably on a quarterly basis. Secondly, data on maturity pattern of the Government of India Rupee loans outstanding at the end of the year classified into different periods with a 5-year interval are released on an annual basis. Data on maturity pattern, on a similar basis, should be extended to include State Government loans. Further, residual maturity by original coupon rates should also be published.
The Government-guaranteed bonds are not treated as part of Government securities but as an integral part of the corporate debt. However, in view of the sovereign guarantee extended and the large magnitudes of such securities in the debt market, they deserve to be separately identified as a category, and data collected and disseminated. RBI should take up with the Central and State Governments and the regulator for other securities to mount an information system for this purpose.
Money Market (Para 10.7.8)
Introduction of the negotiated dealing screen (NDS) system should be operationalised urgently by RBI, so as to enable on-line access to data pertaining to all money market instruments. This would help reduce the time lag in release of data on call/notice money market, Commercial Papers (CPs), Certificates of Deposits (CDs) and bills rediscounting market.
Pending the introduction of NDS, RBI should improve coverage of daily data on call/notice money market transactions and reduce the time lag in data on Commercial Paper, Certificates of Deposit and the bills rediscounting market. This would be facilitated with the full-scale operationalisation of Very Small Aperture Terminal (VSAT), which would connect all the banks amongst themselves and with RBI and there would be inter-connectivity between branches of banks. Such a system would facilitate treasury management and management information system of banks as also reporting to RBI through electronic media. Hence, with faster submission of data by banks to RBI, the time lag in dissemination of data to the market would be greatly reduced.
While the setting up of a Clearing Corporation is a welcome step, efforts should be made to ensure that the Corporation aids the process of comprehensive, timely and reliable data dissemination in regard to secondary market transactions in both money market instruments and Government securities.
Fiscal Statistics (Para 10.8.29)
General Budget Data
The Expenditure Budget of Central Government provides data on Budget Estimates and the Revised Estimates of Internal and Extra Budgetary Resources (IEBR) of the Central Public Sector Enterprises. The account (actuals) figures on resources raised by these enterprises against the Budget Estimates (BE) and Revised Estimates (RE) are not available. Therefore, the details of actuals of IEBR (including the amount of External Aid) should be published in the Budget.
The accounts data on State-wise distribution and devolution of income tax, basic and additional excise duties, etc. are not published in the Receipt Budget of Government of India while the Budget Estimates (BE) and Revised Estimates (RE) are available. The account data on amounts of devolution actually transferred to the States are available elsewhere in the publications of Ministry of Finance and the Planning Commission. Therefore, the accounts data should be provided in the Budget documents for the subsequent years for the purpose of consistency.
Tax expenditure, which arise in the context of various exemptions that are extended under various tax laws, are yet to be quantified. Therefore, the details on both tax expenditure and implicit subsidies; tax arrears and tax refunds should be provided in the budgets of the Central and the State Governments.
The Combined Finance and Revenue Accounts published by the Comptroller and Auditor General of Accounts (CAG) is the only source where the Fiscal Statistics of both the Centre and individual States are published. At present, there is a considerable time lag in this publication. This publication should be released promptly and regularly.
The detailed data of State Finances on a comparable basis is not available in the country. Though the RBI does publish an annual consolidated study, there persists a need to have a detailed and comparable data set for each State – individually and consolidated. There are significant differences in the budgetary practices between different States. There has to be a uniform classification of a proper plan to classify the data on a comparable basis, eliminating inter and intra-Government transfers. The Central Government should therefore ensure that such data are compiled and disseminated on an early basis.
No published information is available on various Centrally sponsored schemes. The data on financing pattern of Centrally sponsored schemes in different States and the expenditures incurred in different States from Central funds and States’ own contributions should be compiled and disseminated along with the Budget documents
The State Governments do not provide high frequency data on major fiscal indicators on a monthly basis as is the practice followed by the Central Government. Therefore the State Governments should make available to the public the data on major fiscal variables on a monthly basis.
To assess the current system of accounts and budgets of local bodies, and to establish uniform budget practices for local bodies on the pattern of Central and State Governments, a system of consolidation of accounts by the States should be evolved and thereafter followed at national level. At the initial stage, the accounts of bigger local bodies such as those of the metropolitan cities, municipal corporations and municipalities should be taken up completely, while the accounts of smaller bodies may be covered through suitably designed sample surveys. The securities issued by the local bodies should be published in the State Government budgets.
The issue of providing guarantees has significant implications for the sustainability of the fiscal position of the Governments – Central and States. Further, some forms of guarantees, like the letters of comfort issued by State Governments to banks and financial institutions, are in nature of implicit guarantees, which are not included in the present estimates of guarantees in India, but are internationally treated as guarantees. Therefore adequate arrangements for reporting and monitoring of guarantees granted by Central and State Governments should be instituted.
The draft Manual on Government Finance Statistics 2000 of the International Monetary Fund (IMF) favours revised principle of recording the flows on accrual basis switching over from the current system of cash basis. Accordingly, the Government may consider, in due course, dissemination of Fiscal Statistics on accrual basis as per advice of the Comptroller and Auditor General of India (CAG).
The details regarding the tax records, revenue as raised, revenue foregone on account of concessions contained in the budget proposals, receipt on tax arrears of the previous years and taxes collected through special schemes are not separately indicated. This data in gross and net terms should be given in the Budget Documents in a more transparent and detailed manner.
The data on tax revenue of Central Government should be disseminated promptly and State wise break-up made available.
The data published by the Directorate of Income Tax in its All India Income Tax Statistics (AIITS) are based on estimates derived from a small sample size and is therefore rendered unrepresentative. Therefore the sample size and design should be modified to make it more representative and broad-based considering the manifold increase in the number of assessees. Further, the time lag in the publication should also be reduced.
The computerisation and net working of Field offices of the Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) should be completed on a priority basis for improving the data quality, better management and speedier transmission of data from the field offices to the Directorates at the Centre. To generate a comprehensive database on various aspects of Direct and Indirect Tax Statistics, the CBEC and CBDT should generate profiles of all tax assessees by implementing complete computerisation of various returns filed by assessees.
The organisational set up for collection of statistics in the field offices of CBDT and CBEC should be strengthened. The Research and Statistics Wing, Directorate of Income Tax should be the nodal agency on all statistical activities and function directly under CBDT. A Research Unit should also be set up in CBDT to undertake research studies on various aspects of tax planning.
A data warehouse for Fiscal Statistics at the National level within the Department of Economic Affairs (DEA) should be established. Such an institutional mechanism is intended to collect, compile and store the data generated and disseminated by various official agencies which would not only help to build up a comprehensive database on Indian Fiscal Statistics but also to identify the data gaps at the macro and micro levels.
Balance of Payments (Para 10.9.20)
The implementation of recommendations made in Reports of various committees and groups already constituted to closely examine different aspects of Balance of Payments (BoP) data needs to be expedited with a view to further refining items of the BoP statistics. In fact, there should be a continuous review of the methods of collecting data with regard to BoP on account of the anticipated developments in liberalisation of external sector transactions on both the current and capital accounts. In particular, this would be necessitated by any further review of repatriation and surrender requirements in the current account and liberalisation of the capital account.
Steps should be taken to identify and narrow down the differences in merchandise trade data as compiled by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) and those reported on payments basis by RBI.
The coverage of Electronic Data Interchange (EDI) system should be enlarged to more ports and different types of shipping bills so as to facilitate a matching of exports data on the basis of Daily Trade Return (DTR) and those on the basis of exports negotiated contract (ENC). This would result not only in the narrowing down of differences in exports data between DGCI&S and RBI but would also facilitate recording of exports data on the basis of ENC statements reflecting change of ownership.
The coverage of DGCI&S data on imports should be enhanced to include defence items, aircraft, oilrigs, etc. This would help in narrowing down the differences between DGCI&S and RBI data.
The import data should be compiled on free on board (f.o.b.) basis. RBI should examine the possibilities of conducting surveys to collect information on freight and insurance components from DTR data, which in due course would facilitate compilation of imports on f. o. b. basis.
The purpose codes prescribed for reporting of foreign exchange transactions by Authorised Dealers (ADs) to RBI should be enlarged to capture more disaggregated data on international trade in services. Further, the mechanism of data reporting by the ADs should be supplemented by surveys on important areas of services.
The tourist arrival figures as compiled by the Ministry of Tourism are used by RBI for estimating travel receipts. In order to improve the quality of these estimates, the Ministry of Tourism should conduct surveys on the expenditure pattern of tourists drawn from different broad regions of the world on a regular basis.
Although RBI collects data on software exports through Software Exports (SOFTEX) forms, it uses NASSCOM data as a controlling total for gross receipts from software exports. There is, however, a need to re-examine the current methodology on collection of software export data. RBI, therefore, should constitute a technical group consisting of members from RBI, Ministry of Commerce, CSO, NASSCOM and a few major software companies to comprehensively examine the data reporting mechanism for software exports.
In a liberalising economy, it becomes increasingly necessary to rely on surveys to plug information gaps. RBI should conduct periodical surveys on dividends and profits arising out of foreign direct investment (FDI) and portfolio investment separately.
There is a need for surveys by RBI on disinvestment in India and abroad by non-residents and resident Indians, respectively.
The RBI should take necessary steps to capture data on portfolio investment by NRIs in order to improve the coverage of the capital account in the BoP.
In order to ensure complete coverage of short-term credit, RBI should institutionalise a mechanism for collection of data on suppliers’ credit up to 180 days, which would have an impact on the capital account of the BoP. This information is also required on stock basis to improve the coverage of the external debt statistics.
External Debt and International Investment Position (Para 10.10.14)
As suggested by the Study Group on Short-Term Debt under the aegis of the Monitoring Group on External Debt in the Ministry of Finance in order to capture data relating to suppliers’ credit up to 180 days, RBI should modify the existing floppy based R-Return reporting by introducing an additional field on date of shipment. While this information is required for complete coverage of external debt, it would also enhance the coverage of short-term credits in the capital account of the balance of payments (BoP).
The RBI should introduce a computerised Comprehensive Single Return for Non-Resident Indian (NRI) Deposits as suggested by the Study Group on NRI Deposits for compilation of external debt data on residual maturity basis.
The quarterly external debt data are disseminated with a time lag of 5 to 6 months from the reference period. This time lag should be reduced to 3 months, which would also meet the Special Data Dissemination Standards (SDDS) requirement of timeliness.
Steps should be taken by agencies responsible for external debt data [namely, the Controller of Aid, Accounts and Audit, and External Debt Management Unit (EDMU) in the Ministry of Finance and RBI] to provide additional sectoral classification of non-government external debt into banks and other sectors (private and public non-bank enterprises), which would also meet the SDDS requirement of sectorisation.
At present, the stock of Foreign Institutional Investors’ (FIIs’) investment in debt securities is estimated on the basis of accumulation of flows in the absence of direct data on stocks. RBI should take necessary steps to put in place a data collection mechanism for stock data on FIIs’ investment in debt securities at market prices in consultation with Securities and Exchange Board of India (SEBI), FIIs and custodial banks.
The RBI should re-orient its methodology for compilation of data on International Investment Position (INIP) by making increasing use of flow data wherever the stock data are not readily available with a view to generating quarterly data with a time lag of six months, which would meet the timeliness requirement under SDDS of the IMF.
E-Commerce (Para 10.12.10)
The database on electronic commerce has to be established. Since e-commerce is still at initial stages and has significant cross-border linkages, it is necessary for the Central Statistical Organisation (CSO) to closely align the statistical system with initiatives on World Trade Organisation.
It is necessary to conduct surveys covering e-commerce providers for data on income, expenditure, value added, etc.