IMF critique: RBI guv says Indian data fairly accurate, DG downplays ‘crawl’ comment
Governor Sanjay Malhotra said the RBI acknowledged that the GDP and inflation estimates given by the government were “fairly accurate” but there could be room for improvement.
Lieutenant Governor Poonam Gupta said Indian systems are suffering from inflation, factory production etc. It was graded A or B in most aspects, including but only received a ‘C’ in national accounts, he said, adding that the poor grades were due to problems with the base year.
“This is not about the quality of the data, it is not about the sanctity of the figures put forward. It is about a basis that is perceived as outdated. I think they will be satisfied with this revision in that regard,” Gupta said. he said.
Similarly, on the exchange rate front, Gupta said the IMF has three broad ways to classify a country – fixed, floating and managed floats, adding that almost all emerging markets manage floats.
“Within the managed volatility, the RBI is trying to reduce the volatility on both sides to a reasonable level. The IMF looked at the last 6 months of data and found that this volatility is within a range they had in mind,” he said.
“Based on that, they have a subclassification called creeping nail. I don’t think much of it,” the academic-turned-central banker added.
The IMF assessment is based on cross-country comparison, he said, adding that the fact remains that India, like most emerging markets, is a managed float.
