2.8.1 The deregulation of financial markets has accelerated the pace of financial innovations and brought forth the need for regular and timely flow of qualitative financial statistics for pursuing sound macro-economic policies as well as promoting financial stability. In the context of the recent financial crises, the traditional issues in Financial Statistics such as timeliness in dissemination, accuracy, transparency, harmonisation, international comparability, etc. have come into sharper focus. In addition, many unconventional issues relating to classification, valuation and measurement of financial transactions have also attracted attention. An efficient use of Financial Statistics requires greater harmonisation of Financial Statistics with other related system of accounts such as national accounts, balance of payment statistics, etc. The need for data standardisation, wider coverage and higher frequency has become important from the viewpoint of analysis and the establishment of linkages among various market segments. Since financial markets are much more information driven, timeliness in dissemination of reliable information assumes special importance. Furthermore, there are data gaps such as for informal markets which, depending on their size, are relevant for policy.
2.8.2 The international initiative in this direction has resulted in the IMF establishing the Special Data Dissemination Standards (SDDS) in April 1996, in order to enhance the timely availability of comprehensive statistics relating to the real, fiscal, Financial and External sectors of the economy. As a subscriber to SDDS, the concerned agencies in India have made concerted efforts to adhere to the data standards of SDDS. With the use of technology, it is possible to quickly disseminate data to a wider range of users. With a larger role for markets and increasing cross-border financial flows, transparency has assumed significance not only for market participants but also for regulators. Apart from transparency, timeliness and quality of the information made available as public good have also assumed importance. Alignment with international standards in economic, banking and financial areas is critical for the enormous efficiency-enhancing value that this offers. A further emergence of new institutions in the regulatory sphere poses new opportunities and challenges.
2.8.3 The Commission while making its recommendations on Financial and External Sector Statistics took into account this changing environment. It noted that an institutional infrastructure already exists in India for collection and dissemination of statistics on these sectors. The Reserve Bank of India (RBI) is the principal though not the sole agency for collection and dissemination of statistics in respect of Financial and External Sector Statistics. It collects and disseminates these data through its various publications, website and press releases. The other major public sector agencies and institutions that collect, compile and disseminate Financial Statistics are the Ministry of Finance, Securities and Exchange Board of India (SEBI), National Bank for Agriculture and Rural Development (NABARD) and Industrial Development Bank of India (IDBI). The Insurance Regulatory and Development Authority (IRDA) would have an important role in collection and dissemination of data with regard to the Insurance Sector. The Commission has noted that many of these institutions have been taking into account the changing environment and modifying their data collection formats from time to time. For instance, the modalities for the collection of data on the External Sector have been modified as per the recommendations of the High Level Committee on Balance of Payments, 1993, (Chairman, Dr. C. Rangarajan). The Commission also noted that by and large, the data available on Financial and External Sectors in India are in conformity with relevant international manuals on External, Monetary and Financial Statistics. However, the Commission identified some areas that need further refinement to suit the unique needs of Indian economy, the recent institutional development in the Financial Sector especially the developments in financial markets. In particular, the Commission has identified the needs in respect of data relating to fiscal, informal sector, insurance and e-commerce.
2.8.4 The monetary and Financial Statistics as well as data relating to commercial banks published by RBI are reliable, adequate and reasonably timely. However, there are deficiencies in respect of data relating to non-banking finance companies (NBFCs) and the Informal Financial Sector, which need to be addressed by RBI urgently. There is a need for NABARD to improve the quality and timeliness of data relating to co-operative banks and also to initiate surveys on financial data relating to Non-Governmental Organisations and Self Help Groups.
2.8.5 While SEBI should continue to have the primary responsibility for collection and dissemination of data in respect of capital markets, there is a need for improvement in data with regard to private placement and daily dissemination of data by all stock exchanges in a standardised format. The primary responsibility for collection and dissemination of data in respect of the Insurance Sector should naturally rest with IRDA.
2.8.6 While the data disseminated by RBI on the Government securities market compares well with international standards, there is a need to improve the coverage and timeliness of data with regard to certain money market instruments such as Commercial Papers (CP) and Certificate of Deposits (CD). As the data on money and the Government securities market are critical not only for the market participants but also for RBI in its own day-to-day monetary management, with further improvement in technology such as implementation of the negotiated dealing system (NDS), full-scale operationalisation of Very Small Aperture Terminal (VSAT), such data should be made available on a real time basis. Keeping in view the impact of fiscal policy on the Real, Financial and External Sectors of the economy, there is scope for further improvement in terms of coverage, classification and dissemination. There is also a need for establishment of a data warehouse for fiscal statistics.
2.8.7 While the balance of payments statistics compiled and released by RBI are broadly consistent with the international standards, and are disseminated widely and in a timely manner, certain discrepancies in data have, however, persisted and certain new areas have emerged which need further attention. For instance, there are continuing discrepancies in merchandise trade data, both exports and imports, between the Directorate General of Commercial Intelligence and Statistics (DGCI&S) and RBI. There is also a need for more detailed data on trade in services, which has emerged as an important component of balance of payments. In view of electronic commerce being a new and fast growing way of conducting business, there is a need for developing an appropriate methodology by closely monitoring the international trends and multilateral initiatives for data compilation.
2.8.8 Notwithstanding the progress made so far by the concerned agencies, namely, RBI, SEBI, NABARD, IDBI, IRDA and Ministry of Finance, there is a need to focus on the areas recommended by the Commission so as to further strengthen the process of collection, compilation and dissemination of the Financial and External Sector Statistics.
