The Reserve Bank of India organised the 6th Statistics Day Conference on July 17, 2012. The theme of the conference was 'Data Gaps and Central Banks'. Distinguished statisticians, academicians and policy makers from India and abroad, such as, Prof. R. Radhakrishna, Chairman, National Statistical Commission; Dr. Aurel Schubert, Director General Statistics, European Central Bank; Prof. J.R. Varma, IIM Ahmedabad; Prof. Probal Chaudhuri, ISI Kolkata and Prof. Amit Bubna, ISB, Hyderabad were invited to speak in the conference. They deliberated upon issues relating to data gaps, national and international initiatives to bridge them and challenges for statistics in finance in the post crisis world. Two technical papers were presented on Mahalanobis’ Fractile Graphical Analysis and Relationships in Financial Markets - Methodology and Applications.
Statistics Day is observed in India on the occasion of the birth anniversary of Prof. Prasanta Chandra Mahalanobis to commemorate his sterling contribution to statistics and the Indian statistical system.
Dr. D. Subbarao, Governor, Reserve Bank of India in his inaugural address recounted how financial crises from the days of Great Depression triggered the development of statistical systems and statistical analysis. He referred to the G-20 Data Gaps Initiative, an international coordinated response to the data gaps and flaws identified in the ongoing global financial crisis. In the Indian context, he pointed to the need for improvement in data on non-banking financial companies, cooperative banking system, priority sector credit, financial inclusion, corporate saving and expenditure side GDP estimation. He also focussed on challenges in measurement and interpretation of data such as inflation, especially core inflation and potential output, particularly in the Indian context. He reiterated that the Reserve Bank looks at all measures of inflation, both headline and disaggregated. He drew attention to the need for in-depth analysis of data while citing examples of misinterpretation of data by analysts with regard to interest burden of corporates and the movement of real interest rates. He restated that interest cost is only one of the several factors that have dampened growth, and the increase in policy rate by the Reserve Bank alone cannot explain the investment slowdown.
Dr. Subir Gokarn, Deputy Governor drew upon some important contributions of Prof. Mahalanobis in the development of macroeconomic database in India and statistical analysis. In the context of central banks, he drew attention to the need for quality data, good analysis, adequate representation and informed judgments, which are key elements of the right decisions. He emphasised the critical role of the policy desk or the operational units to ask the right questions to begin with and formulate the issues as precisely as possible in order to expect the statistical tools to offer credible solutions. He gave several real life examples relating to money demand analysis, compilation of asset prices and measurement of yield curves to highlight the complexities in data analysis and modelling. He pointed to the evolving research agenda of the Reserve Bank to deal with such issues.
Earlier, while welcoming the participants, Shri Deepak Mohanty, Executive Director, briefly narrated recent initiatives of the Reserve Bank in addressing data gaps. These include implementation of Sixth edition of IMF’s Manual on Balance of Payments (BoP) statistics, introduction of the Co-ordinated Direct Investment Survey (CDIS) and dissemination of various forward looking quarterly survey resultssimultaneously with quarterly report on Macroeconomic and Monetary Developments accompanying the monetary policy statement. He emphasised that the data reporting systems need to be geared towards automated data capture from the source systems to ensure integrity and faster delivery of data. For forecasting of the key macroeconomic variables, he underscored the need to revisit the modelling strategy in the light of the increased uncertainty, leverage and global linkages so as to capture the underlying dynamics of economic-financial framework by harnessing appropriate statistical tools.
Prof. Radhakrishna, in his keynote address, presented key features of evolutions of Indian statistical system and emphasised the need to improve coordination and quality human resources of statistical units across the country. He also highlighted some of the recent initiatives including introduction of legal set-up for statistics collection and implementation of various recommendations of the National Statistical Commission 2001.
Dr. Schubert highlighted the initiatives of reorienting the European statistical system towards financial statistics aspects with the ongoing global crisis. Prof. Varma highlighted how the role of statistics for finance has changed during post crisis period, particularly dealing with big data, hidden data, broken data, broken models and envisaged a far more important but complex role of statistics in finance. Prof. Chaudhury highlighted the recent developments on Mahalanobis’ Fractile Graphs and its application to financial data analysis. Prof. Bubna explained the need to understand the presence of network in the context of financial intermediation and discussed its application in finance.
The deliberations in the conference will help in shaping the agenda of future statistical work in the Reserve Bank.
Chief General Manager
Press Release : 2012-13/88