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India: Staff Report for the 2008 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
March 2009
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Annex I: India—Medium-Term Public Debt Sustainability Analysis

A. The Baseline Scenario

Staff assumptions. After a significant dip in 2009/10, economic growth is forecast to rise gradually to potential (8 percent) as global conditions improve and progress is made on structural reforms (see Table 6). Inflation is projected to remain contained. Despite continued fiscal stimulus, the general government deficit is expected to decline marginally in 2009/10 as lower commodity prices lighten the subsidy bill and the effect of the Sixth Pay Commission wage hike wears off. Other working assumptions include:

  • Oil bonds. After 2008/09, the government is assumed to issue oil bonds to the state-owned petroleum companies only to cover the subsidy cost of kerosene.

  • Other off-budget bond issuance. After 2008/09, the government is assumed not to issue further bonds to the Food Corporation of India or the fertilizer companies as these expenses are brought on-budget.

Debt path. Under the baseline scenario, the general government deficit would fall to 5.1 percent of GDP by 2013/14 from nearly 10 percent of GDP in 2008/09. Over the same period, gross public debt would decline to 74 percent of GDP from 80 percent of GDP in 2007/08, although it is projected to rise in 2008/09 and 2009/10 to a peak of 83 percent of GDP.

FRBMA targets. However, achievement of current balance by the central government, targeted for 2009/10 under the FRBMA, is not expected within the next 5 years, due to the expected ramp-up of plan spending to support growth in 2009/10, and the government's commitments on account of the agricultural debt write-off.

B. Sensitivity Analysis

After an initial rise, a gradual decline in the debt-to-GDP ratio would occur under various shocks, including in a scenario where the growth-interest rate differential rises above its historical average or the currency experiences a sharp depreciation (Figure I.1 and Table I.1).

However, in the case of a return to historical averages for the primary balance, real GDP growth, and real interest rates, the debt ratio would rise over the medium term. The path of the debt-to-GDP ratio is also highly sensitive to the growth assumptions. In the case of a protracted slowdown, with real GDP growth averaging 5 percent, the ratio of debt to GDP would rise over the medium term. A 10 percent of GDP shock to contingent liabilities would sharply raise the debt ratio to 93 percent of GDP, though it would resume its decline after the initial spike.

Figure I.1.India: Public Debt Sustainability: Bound Tests 1/

(Public debt, in percent of GDP)

Source: Fund staff estimates.

1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.

2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.

3/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2009, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).

Table I.1.India: Public Sector Debt Sustainability Framework, 2003–2013(In percent of GDP, unless otherwise indicated)
ActualProjections
20032004200520062007200820092010201120122013
Baseline: Public sector debt 1/87.387.285.282.080.580.682.782.981.078.275.0
o/w foreign-currency denominated7.46.75.95.35.15.35.35.14.94.74.4
Change in public sector debt2.4−0.1−2.1−3.2−1.40.02.10.2−1.9−2.8−3.2
Identified debt-creating flows (4+7+12)0.3−3.0−2.6−3.8−4.20.11.50.1−2.0−2.9−3.3
Primary deficit3.01.51.61.10.23.83.52.10.70.2−0.2
Revenue and grants18.719.419.720.922.721.721.221.522.022.623.0
Primary (noninterest) expenditure21.720.921.322.023.025.524.723.622.822.722.9
Automatic debt dynamics 2/−2.4−4.6−4.6−5.7−5.3−5.4−2.0−2.0−2.8−3.1−3.1
Contribution from interest rate/growth differential 3/−1.9−4.3−4.8−5.6−4.8−5.4−2.0−2.0−2.8−3.1−3.1
Of which contribution from real interest rate3.31.82.21.71.9−0.31.72.92.82.62.5
Of which contribution from real GDP growth−5.2−6.1−7.0−7.3−6.7−5.1−3.8−4.9−5.6−5.7−5.6
Contribution from exchange rate depreciation 4/−0.4−0.30.2−0.1−0.5
Other identified debt-creating flows−0.40.00.40.90.91.70.00.00.00.00.0
Privatization receipts (negative)−0.5−0.2−0.10.0−0.1−0.10.00.00.00.00.0
Recognition of implicit or contingent liabilities0.10.30.50.90.91.70.00.00.00.00.0
Other (specify, e.g., bank recapitalization)0.00.00.00.00.00.00.00.00.00.00.0
Residual, including asset changes (2-3) 5/2.22.90.50.62.80.00.60.10.10.10.1
Public sector debt-to-revenue ratio 1/466.2449.3431.7392.2354.6371.8390.4385.7367.7346.3325.4
Gross financing need 6/9.47.77.36.55.98.99.17.76.45.75.2
in billions of U.S. dollars53.851.957.257.565.0107.9113.1103.994.792.692.6
Scenario with key variables at their historical averages 7/80.681.281.481.581.781.8
Scenario with no policy change (constant primary balance) in 2008-201380.680.280.880.680.179.4
Key Macroeconomic and Fiscal Assumptions Underlying Baseline
Real GDP growth (in percent)6.97.99.19.89.37.35.16.57.57.88.0
Average nominal interest rate on public debt (in percent) 8/8.48.17.67.67.87.77.27.57.77.77.7
Average real interest rate (nominal rate minus change in GDP deflator, in percent)4.62.83.22.73.10.22.64.14.13.93.9
Nominal appreciation (increase in US dollar value of local currency, in percent)5.34.6−3.31.912.3
Inflation rate (GDP deflator, in percent)3.85.34.44.94.77.54.73.33.63.83.8
Growth of real primary spending (deflated by GDP deflator, in percent)7.54.011.213.114.319.02.01.73.77.78.7
Primary deficit3.01.51.61.10.23.83.52.10.70.2−0.2
Source: Fund staff estimates, calendar year data.

General government debt Covers central and State governments.

Derived as [(r - π(1+g) - g + αε(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; π = share of foreign-currency denominated debt; and ε = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).

The real interest rate contribution is derived from the denominator in footnote 2/ as r-π(1+g) and the real growth contribution as -g.

The exchange rate contribution is derived from the numerator in footnote 2/ as αε(l+r).

For projections, this line includes exchange rate changes.

Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.

The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.

Derived as nominal interest expenditure divided by previous period debt stock.

9/ Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.
Source: Fund staff estimates, calendar year data.

General government debt Covers central and State governments.

Derived as [(r - π(1+g) - g + αε(1+r)]/(1+g+π+gπ)) times previous period debt ratio, with r = interest rate; π = growth rate of GDP deflator; g = real GDP growth rate; π = share of foreign-currency denominated debt; and ε = nominal exchange rate depreciation (measured by increase in local currency value of U.S. dollar).

The real interest rate contribution is derived from the denominator in footnote 2/ as r-π(1+g) and the real growth contribution as -g.

The exchange rate contribution is derived from the numerator in footnote 2/ as αε(l+r).

For projections, this line includes exchange rate changes.

Defined as public sector deficit, plus amortization of medium and long-term public sector debt, plus short-term debt at end of previous period.

The key variables include real GDP growth; real interest rate; and primary balance in percent of GDP.

Derived as nominal interest expenditure divided by previous period debt stock.

9/ Assumes that key variables (real GDP growth, real interest rate, and other identified debt-creating flows) remain at the level of the last projection year.

Figure II.1.India: External Debt Sustainability: Bound Tests 1/

(External debt, in percent of GDP)

Source: Fund staff estimates.

1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.

2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.

3/ One-time real depreciation of 30 percent occurs in 2007/08.

Table II.1.India: External Debt Sustainability Framework, 2004/05–2013/14(In percent of GDP, unless otherwise indicated)
ActualProjections
04/0505/0606/0707/0808/0909/1010/1111/1212/1313/14
Debt-stabilizing non-interest current account 6/
Baseline: external debt19.017.118.719.219.518.719.520.120.621.1−3.3
Change in external debt0.4−1.91.60.50.3−0.90.80.60.50.50.0
Identified external debt-creating flows (4+8+9)−4.1−3.2−2.7−6.11.0−0.4−1.7−1.6−1.5−1.60.0
Current account deficit, excluding interest payments−0.30.60.50.72.10.81.41.31.31.33.3
Deficit in balance of goods and services2.63.63.44.45.94.24.95.05.04.8
Exports18.320.122.321.223.420.520.921.522.323.0
Imports20.923.725.725.729.324.725.826.627.227.9
Net nondebt creating capital inflows (negative)−1.9−1.9−1.7−3.8−0.7−0.9−2.6−2.6−2.5−2.5−2.5
Net foreign direct investment, equity0.50.40.91.31.71.11.51.31.21.2
Net portfolio investment, equity1.31.50.82.5−1.0−0.21.11.31.31.3
Automatic debt dynamics 1/−1.9−1.8−1.5−3.0−0.4−0.3−0.4−0.3−0.3−0.3−0.8
Denominator: 1+g+r+gr1.21.21.11.31.01.11.11.11.11.11.1
Contribution from nominal interest rate0.70.60.60.70.80.60.81.01.11.21.2
Contribution from real GDP growth−1.3−1.5−1.5−1.3−1.2−1.0−1.2−1.4−1.4−1.5−1.5
Contribution from price and exchange rate changes 2/−1.3−1.0−0.6−2.4−0.4
Residual, including change in gross foreign assets (2-3) 3/4.51.34.36.6−0.7−0.42.52.22.12.10.0
External debt-to-exports ratio (in percent)103.584.883.990.583.691.293.493.392.491.7
Gross external financing need (in billions of U.S. dollars) 4/44.274.771.994.5134.6120.3140.7163.6184.3205.7
In percent of GDP6.39.27.88.111.59.410.210.811.111.2
Scenario with key variables at their historical averages 5/14.111.110.59.89.08.3−2.2
Key macroeconomic assumptions underlying baselineFor debt stabilization
Real GDP growth at market prices (in percent)8.39.29.79.06.35.37.07.67.98.08.0
GDP deflator in US dollars (change in percent)8.05.63.317.1−5.73.11.01.81.92.02.0
Nominal external interest rate (in percent)4.23.94.04.84.13.54.45.96.16.26.2
Growth of exports goods and services (U.S. dollar terms, in perc37.926.725.521.610.3−4.710.213.013.813.7
Growth of imports goods and services (U.S. dollar terms, in perc51.730.523.027.514.4−8.413.112.712.712.6
Current account balance, excluding interest payments0.3−0.6−0.5−0.7−2.1−0.8−1.4−1.3−1.3−1.3
Net non-debt creating capital inflows1.91.91.73.80.70.92.62.62.52.5
B. Bound Tests
B1. Nominal interest rate is at historical average plus one standard deviation19.618.719.620.220.8−3.3
B2. Real GDP growth is at historical average minus one standard deviations19.719.020.020.821.5−3.3
B3. Non-interest current account is at historical average minus one standard deviations20.219.921.322.523.5−3.4
B4. Combination of B1-B3 using 1/2 standard deviation shocks20.019.520.721.722.6−3.3
B5. One time 30 percent real depreciation in 200625.724.224.925.325.6−4.5
Source: Fund staff estimates.

Derived as [r - g - ρ(1+g) + ea(1+r)]/(1+g+ρ+gρ) times previous period debt stock, with r = nominal effective interest rate on external debt; ρ = change in domestic GDP deflator in U.S. dollar terms, g = real GDP growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.

The contribution from price and exchange rate changes is defined as [-ρ(1+g) + ea(1+r)]/(1+g+ρ+gρ) times previous period debt stock. ρ increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator).

For projection, line includes the impact of price and exchange rate changes.

Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period. Short-term debt includes all the outstanding non-resident deposit accounts.

The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both noninterest current account and non-debt inflows in percent of GDP.

Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.

Source: Fund staff estimates.

Derived as [r - g - ρ(1+g) + ea(1+r)]/(1+g+ρ+gρ) times previous period debt stock, with r = nominal effective interest rate on external debt; ρ = change in domestic GDP deflator in U.S. dollar terms, g = real GDP growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.

The contribution from price and exchange rate changes is defined as [-ρ(1+g) + ea(1+r)]/(1+g+ρ+gρ) times previous period debt stock. ρ increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator).

For projection, line includes the impact of price and exchange rate changes.

Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period. Short-term debt includes all the outstanding non-resident deposit accounts.

The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both noninterest current account and non-debt inflows in percent of GDP.

Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GDP growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.

Annex III: India—Fund Relations

(As of December 31, 2008)

I. Membership Status: Joined 12/27/45; Article VIII.

II. General Resources Account

SDR Million% Quota
Quota4,158.20100.00
Fund holdings of currency3,630.2987.30
Reserve position in Fund527.9412.70

III. SDR Department:

SDR Million% Allocation
Net cumulative allocation681.17100.00
Holdings1.780.26

IV. Outstanding Purchases and Loans: None

V. Financial Arrangements:

TypeApproval DateExpiration DateAmount Approved (SDR million)Amount Drawn (SDR million)
Stand-By10/31/199106/30/19931,656.001,656.00
Stand-By01/18/199104/17/1991551.93551.93
EFF11/09/198105/01/19845,000.003,900.00

VI. Projected Obligations to Fund (SDR million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20092010201120122013
Charges/interest5.985.625.625.625.62
Total5.985.625.625.625.62

VII. Exchange Rate Arrangement:

Since March 1, 1993, the Indian rupee has floated against other currencies, although the Reserve Bank of India intervenes in the market periodically. As per the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), the exchange rate in India is classified as managed floating with no pre-announced path for the exchange rate. On August 20, 1994, India accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF Articles of Agreement. India maintains the following restrictions on the making of payments and transfers for current international transactions, which are subject to Fund approval under Article VIII, Section 2(a): restrictions related to the nontransferability of balances under the India-Russia debt agreement; restrictions arising from unsettled balances under inoperative bilateral payments arrangements with two Eastern European countries; and a restriction on the transfer of amortization payments on loans by non-resident relatives. The Executive Board has not approved these restrictions.

VIII. Article IV Consultation:

The previous Article IV consultation discussions were held in November 2007. The staff report (IMF Country Report No. 07/402) was discussed by the Executive Board on January 23, 2008.

IX. FSAP Participation and ROSCs:

The data model of the ROSC was issued in April 2004; FSSA/FSAP report was issued in January 2001; a fiscal transparency ROSC was issued in February 2001.

X. Technical Assistance:

DepartmentPurposeDate of Delivery
MAEGovernment securities market2/94
MAEForeign exchange market2/95
FADExpenditure control5/95
FADPublic expenditure management8/95
FADPublic expenditure management (follow-up)5/96
MAEGovernment securities market (follow-up)7/96
STASDDS and statistics12/96
STABalance of payments statistics12/97
STASDDS and statistics2/98
FADState level fiscal database and debt register11/04
FADPilot study on public private partnerships12/04
STABalance of payments statistics9/05
LEGAML/CFT5/08
LEGAML/CFT10/08

XI. Outreach and Other Activities:

DepartmentPurposeDate of Delivery
OAP/APD/NCAERConference: A Tale of Two Giants: India's and China's Experience with Reform and Growth11/03
FADConference: International Experiences with Fiscal Reform1/04
APD/FADSeminar: Decentralization: International Experiences with Subnational Debt Controls1/04
APDTraining: Applying Debt Sustainability Templates to Indian States3/04
APDTraining: Revenue Forecasting5/05
APDSeminar: Going Global: India's Emerging Role in the World Economy at Centro di Studi Internazionali sull'Economia e lo Sviluppo6/06
APDBook: India Goes Global: Its Expanding Role in the World Economy8/06
APDBrookings Institution Panel: Is India's High Growth Sustainable?4/07
APDBook: India: Managing Financial Integration and Growth6/08
APDSeminar: “Have We Seen this Movie Before? Comparing The Crisis of 2008 with East Asia 1998”, presented at ICRIER/IM-Welt conference and Yale Initiative on Asian and International Relations11/08

XI. Resident Representative:

A resident representative's office was opened in November 1991. Mr. Sanjaya Panth has been Senior Resident Representative since August 2008.

Annex IV: India—Relations with the World Bank Group

In Bank FY2008 (July 1-June 30), Bank lending totaled $2.15 billion, down from $3.75 billion in FY2007. IFC also recorded a strong commitment in Bank FY2008 of $1.05 billion. The new World Bank Group's (WBG) Country Strategy (CAS) for India for 2009-2012, discussed with the WBG's Board of Directors on December 11, 2008, focuses on helping India to fast-track the development of much-needed infrastructure and to support the seven poorest states achieve higher standards of living for their people. The strategy envisages a total proposed lending program of US$14 billion for the next three years, of which US$9.6 billion is from the International Bank for Reconstruction and Development (IBRD) and US$4.4 billion (SDR 2.982 billion equivalent at the current exchange rate) from the International Development Association (IDA).

The overarching objective of the new CAS is to scale up the development impact of Bank Group assistance in order to help India move closer to achieving its development goals—including the goal of halving poverty by 2015.

The key thrust of the Bank Group's new CAS strategy will be to provide support to deal with the challenges of achieving rapid, inclusive growth, ensuring sustainable development, and improving service delivery. Scaling up impact will entail a substantially strengthened Bank Group program directed to low-income states, offset by somewhat decreasing shares of lending to the center and other non-lagging states, compared to the prior CAS period. For state level lending, the strategy is to retain an essentially reform and performance-based approach, seeking new opportunities for engagement with the largest and poorest states in order to help strengthen the environment for reform. Through adjustment lending, expected to remain at the current level of approximately 10 percent of total IBRD/IDA lending, continued emphasis is also being placed on support to fiscal and governance reforms at the state level. A major emphasis of the new CAS will be on strengthening weaknesses in project implementation, with a cross-cutting focus on improving the effectiveness of public spending and achieving demonstrable results to scale up the impact of World Bank assistance. IFC's FY09-11 strategy, centering on improving inclusion, managing the impact of climate change, and promoting regional integration, is closely aligned to the Bank's.

Financial operations since 2001/02 are summarized below.

India: World Bank Group-inancial Operations

(In millions of U.S. dollars) 1/

2001/022002/032003/042004/052005/062006/072007/08
Commitments 2/2,8302,0921,3282,7051,8862,4513,174
IBRD1,9049516981,4631,2411,5661,932
IDA9261,1416301,2426458551,242
Disbursements1,9971,5331,8161,8352,1351,9351,904
IBRD8036478928189389471,092
IDA1,1958869241,0171,197988812
Repayments1,1473,4912,4037848429461,086
IBRD7243,0311,871201221282363
IDA424460532582621664723
Debt outstanding and disbursed26,46626,24327,01928,52728,92530,91133,552
IBRD7,0105,0824,2384,8655,5576,2777,040
IDA19,45621,16122,78123,66223,36824,63426,512
Source: World Bank.

On a fiscal year basis beginning April 1.

Based on loan approval date.

Source: World Bank.

On a fiscal year basis beginning April 1.

Based on loan approval date.

Annex V: India—Relations with the Asian Development Bank

The Asian Development Bank (AsDB) operations in India began in 1986. Cumulative public sector loan commitments totaled $19.2 billion as of 31 December 2008 for 112 loans. With an additional $1.6 billion in private sector loans (the latter without government guarantee), total loan commitments on a cumulative basis amount to $20.8 billion. These funds have been provided from the Bank's ordinary capital resources (OCR). Also, AsDB has approved equity investments amounting to $0.2 billion. AsDB's lending and equity activities are summarized below.

India: Asian Development Bank Financial Operations(In millions of U.S. dollars, as of 31 December 2008)
Calendar YearOCR Loan CommitmentsPrivate EquityDisbursements
1986-902,317.610.9338.7
1991-953,364.059.52,131.3
1996763.0591.7
1997563.015.5645.0
1998250.0620.4
1999625.0605.3
20001330.0487.0
20011,500.0269.9
20021,163.625.0576.5
20031,411.00.7658.0
20041,200.029.7381.4
2005367.315.0641.0
20061,260.067.6701.4
20071,232.11,363.5
20081,808.318.61509.9
Total19,154.9242.311,521.0
Source: Asian Development Bank.
Source: Asian Development Bank.

AsDB is currently preparing its India Country Partnership Strategy (CPS) for 2009–12. The proposed strategy will have four strategic pillars. These include: (i) Support for the process of inclusive and environmentally sustainable growth; (ii) Catalyzing investment through the use of innovative business and financing modalities; (iii) Strengthening the results orientation of project design and implementation and emphasizing knowledge solutions; and (iv) Support for regional cooperation. The proposed strategy will focus on key infrastructure sectors such as transport (national highways, state roads, and rural roads), energy (power sector reforms, strengthening transmission and distribution system, hydropower generation, and improvement in energy efficiency), urban (water supply and sanitation, waste management, urban transport, and municipal reforms), and agriculture and natural resource management (irrigation). The proposed strategy will also support the key thematic concerns of environmental sustainability, private sector development and private sector operations, governance and capacity building, gender equity, knowledge solutions, and partnerships during the CPS period.

Annex VI: India—Statistical Issues

1. Macroeconomic statistics are adequate for surveillance, but weaknesses remain in the timeliness and coverage of certain statistical series. India has an elaborate system for compiling economic and financial statistics and produces a vast quantity of data covering virtually all sectors of the economy. India subscribed to the Special Data Dissemination Standards (SDDS) on December 27, 1996 and started posting its metadata on the Dissemination Standards Bulletin Board on October 30, 1997. It is currently in observance of the SDDS, although it uses flexibility options for timeliness of data on general government operations and on the periodicity and timeliness of labor market data.

2. The data module of the Report on Observance of Standards and Codes (ROSC, IMF Country Report No. 04/96) was published in April 2004. It assesses India's data dissemination practices against the SDDS requirements and assesses the quality of six datasets based on the Data Quality Assessment Framework (DQAF) developed by STA.

3. National accounts: The Central Statistical Organization (CSO) has recently reduced the dissemination lag for quarterly releases from three to two months and released a new series of national accounts, with base year 1999–2000 in February 2006. Estimates of value added in constant prices for public administration and defense may be biased upwards, as they are based on the government's wage bill (with arrears counted in the year that they are paid) deflated by the Wholesale Price Index (WPI).

4. Price statistics: The consumer price indices (CPIs) are based on weights that are over ten years old and do not fully capture price developments in the economy. However, since January 2006, the Labour Bureau has published a revised CPI for industrial workers with a 2001 base year and a Working Group is engaged in the revision of the current producer price index to a new base. Presently, there are four CPIs, each based on the consumption basket of a narrow category of consumers (namely industrial workers, urban and nonmanual employees, agricultural laborers, and rural laborers). The CPIs are published with a lag of about one month. A WPI (1993/94=100) is published weekly with a lag of two weeks and is subject to large revisions, especially in periods of rising inflation. In addition, the representativeness of the index may be undermined by the collection of prices from a relatively small sample of products and the infrequent updating of weights.

5. External sector statistics: While the concepts and definitions used to compile balance of payments statistics are broadly in line with the fifth edition of the Balance of Payments Manual (BPM5), the RBI presentation does not strictly follow the BPM5. Furthermore, trade data have quality, valuation, timing, and coverage problems, and data on trade prices, volumes, and composition are not regularly available on a timely basis. Only trade credit extended for more than 180 days is included in the balance of payments (and the IIP and external debt data); trade credit is often less than 180 days in most countries. Bilateral data on services exports to the United States and other developed countries are manifold higher than counterpart services imports published by these same countries. External debt statistics are available on a quarterly basis with a one quarter lag. Estimates of short-term external debt are presented in the debt statistics on an original maturity basis. The short-term maturity attribution on a residual maturity basis is only available annually (and excludes residual maturity of medium- and long-term nonresident Indian accounts). The international investment position (IIP) statistics cover the sectors prescribed in the BPM5 and these data are disseminated within six months of the reference period in respect of annual data. Coverage of direct investment positions data is hampered by the absence of appropriate legal or institutional authority. India began disseminating the Data Template on International Reserves and Foreign Currency Liquidity as prescribed under the SDDS in December 2001. The more up-to-date information on certain variables, such as total foreign reserves, foreign currency assets, gold, and SDRs, are available on a weekly basis and are disseminated as part of a weekly statistical supplement on the RBI web site.

6. Monetary and financial statistics: The RBI web site and the RBI Bulletin publish a wide array of monetary and financial statistics, including reserve money and its components, RBI's survey, monetary survey, liquidity aggregates (outstanding amounts), interest rates, exchange rates, foreign reserves, and results of government securities auctions. The frequency and quality of data dissemination have improved substantially in recent years.

7. Concepts and definitions used by the RBI to compile monetary statistics are in broad conformity with the guidelines provided in the Monetary and Financial Statistics Manual (MFSM). Nevertheless, the following concepts and principles deviate from the MFSM. First, the resident sector data do not provide sufficient information on the sectoral distribution of domestic credit. Specifically, under their present sectorization scheme, the authorities subdivide the resident nonbank sector data by (i) central government; (ii) state government; and (iii) the commercial sector (including other financial corporations, public and other nonfinancial corporations, and other resident sectors). Second, commercial banks add accrued interest to credit and deposit positions on a quarterly basis only (instead of the prescribed monthly basis).

8. The RBI reports monetary data for IFS on a regular basis. Since October 2006, the RBI has initiated the electronic reporting of monetary data, which is a major improvement from the previous paper-based reporting which was prone to errors and delays. India has also submitted to STA test data (starting from December 2001 data) on the Standardized Report Forms (SRFs) that have been developed to implement the methodology outlined in the MFSM. STA is working with the authorities in resolving the outstanding data issues on the development of the SRFs.

9. Fiscal operations: The Ministry of Finance (MoF) posts selected central government monthly fiscal data and quarterly debt data on its web site. However, no monthly data on fiscal performance at the state level are available, and annual data are available only with an 8-month to 10-month lag. Consolidated information is unavailable on local government operations. In addition, data on the functional and economic classification of expenditures are available with considerable lag. There is also scope to improve the analytical usefulness of the presentation of the fiscal accounts. For example, classification of government expenditure between developmental/nondevelopmental and plan/nonplan obscures the economic nature and impact of fiscal actions. The MoF reports central government data (on a cash basis) for publication in the Government Finance Statistics Yearbook (latest reported data correspond to 2006). Some limited general government data has been reported for 2002.

India—Table of Common Indicators Required for SurveillanceAs of January 7, 2009
Memo Items 2/
Date of latest observationDate receivedFrequency of Data 1/Frequency of Reporting 1/Frequency of Publication 1/Data Quality–Methodological soundness 2/Data Quality–Accuracy and reliability 3/
Exchange rates01/7/0901/7/09DDD
International reserve assets and reserve liabilities of the monetary authorities 4/12/26/0801/2/09WWW
Reserve/base money12/26/0801/2/09WWWO, O, LO, LOO, O, O, O, O
Broad money12/19/0801/2/09BWBWW
Central bank balance sheetJun. 0808/30/08AAA
Consolidated balance sheet of the banking systemMar. 0810/1/08AAA
Interest rates 5/01/7/0901/7/09DDD
Consumer price indexNov. 0801/2/09MMMO, LNO, O, OLNO, LO, O, O, O
Revenue, expenditure, balance and composition of financing 6/ – General Government 7/Mar. 0810/01/08AAALNO, LO, O, OO, O, O, O, LO
Revenue, expenditure, balance and composition of financing 6/ – Central GovernmentNov. 0801/2/09MMM
Stocks of central government and central government-guaranteed debt 8/Mar. 0810/01/08AAA
External current account balanceJul-Sep. 0801/5/09QQQLO, O, LO, OLO, O, O, O, LO
Exports and imports of goods and servicesJul-Sep. 0801/5/09QQQ
GDP/GNPJul-Sep. 0812/18/08QQQLO, LNO, LO, LOLNO, LNO, O, O, LO
Gross external debtJul-Sep. 0801/5/09QQQ

Daily (D), Weekly (W), Biweekly (BW), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC (published on April 2, 2004, and based on the findings of the mission that took place during May 13–30, 2002) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Biweekly (BW), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Reflects the assessment provided in the data ROSC (published on April 2, 2004, and based on the findings of the mission that took place during May 13–30, 2002) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state governments.

Including currency and maturity composition.

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