2019 Article IV Consultation-Press Release; Staff Report; Staff Statement and Statement by the Executive Director for India


2019 Article IV Consultation-Press Release; Staff Report; Staff Statement and Statement by the Executive Director for India

Fund Relations

(As of August 31, 2019)

Membership Status:

Joined December 27, 1945; Article VIII.

General Resources Account

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SDR Department:

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Outstanding Purchases and Loans: None

Financial Arrangements:

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Projected Payments to Fund

(SDR million; based on existing use of resources and present holdings of SDRs):

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Exchange Rate Arrangement:

The exchange rate in India is classified as floating. The exchange rate of the rupee is determined in the interbank market, where the Reserve Bank of India (RBI) intervenes at times. The RBI’s role is to modulate excessive volatility so as to maintain orderly conditions. 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.

Article IV Consultation:

The previous Article IV consultation discussions were held in May 2018. The Staff Report (IMF Country Report No. 18/254) and associated Selected Issues (IMF Country Report No. 18/255) were discussed by the Executive Board on July 18, 2018.

FSAP Participation:

Concluding meetings for the latest FSAP Update were held in Delhi and Mumbai in July 2017—the FSSA Update report was published in December 2017 (Country Report No. 17/390). A Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision was issued in January 2018 and published as Country Reports No. 18/4.

Capacity Development (Technical Assistance and Training):

Recent and planned IMF capacity development and training activities with India are discussed in Appendix VII of the staff report.

Resident Representative:

A resident representative’s office was opened in November 1991. Mr. Luis Breuer has been the Senior Resident Representative since July 2019.

Information on the Activities of Other IFIS

Information on the activities of other IFIs in India can be found at:

Statistical Issues

1. General: Data provision is broadly adequate for surveillance. However, weaknesses remain in the timeliness and coverage of certain statistical series. India has an intricate system for compiling economic and financial statistics and produces a vast quantity of data covering most 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. 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 the IMF’s Statistics Department (STA).

2. National accounts and employment statistics: In January 2015 the Central Statistical Office (CSO) released a new series of national accounts, with base year 2011/12. In addition to the shift in the base year for measuring growth, the revisions reflected a review of source data and compilation methods, and implementation of the 2008 System of National Accounts. For current price estimates, the data sources provide adequate coverage of economic activities, and the methodology is broadly consistent with international standards and best practices. Nonetheless, a sales-tax-based extrapolation of trade turnover value from the base year does not provide an accurate gauge of growth of economy-wide value added from trade. The supply-side data are deemed to be of better quality than expenditure-side data. There are still some weaknesses in the deflation method used to derive value added. Also, the compilation of constant price GDP deviate from the conceptual requirements of the national accounts, in part due to the use of the Wholesale Price Index (WPI) as a deflator for many economic activities. The appropriate price to deflate GDP by type of activity is the Producer Price Index (PPI), which is under development. Large revisions to historical series, the relatively short time span of the revised series, and major discrepancies between GDP by activity and GDP by expenditure complicate analysis. There are long-standing deficiencies in employment data: they only cover the formal sector, which accounts for a small segment of the labor market, and are available only with a substantial lag.

3. Price statistics: A revised all-India Consumer Price Index (CPI) with new weights was released in early 2011, which covers combined rural and urban India, with 2009/10 as a base year. As well, separate corresponding urban and rural CPI series are published. The CPIs are published with a lag of about one month. In early 2015, the CPI weights were updated using 2011/12 expenditure data and the CPI series has been revised from January 2015. Since January 2006, the Labour Bureau has published a CPI for industrial workers with a 2001 base year. Presently, there also remain four CPIs, each based on the consumption basket of a narrow category of consumers (namely industrial workers, urban and non-manual employees, agricultural laborers, and rural laborers). With the exception of the industrial workers’ CPI, these other indices are based on weights that are over ten years old. The WPI has been rebased to the 2011/12 base year. The authorities are in the process of developing a PPI to replace the WPI. A new RBI price series on residential property price indexes have helped surveillance in this area, though geographic coverage remains limited, and price data for commercial real estate are not available. The RBI has started producing a series covering rural wage data, which helps surveillance, but economy-wide wage data are scant.

Government finance statistics: The Ministry of Finance (MoF) is responsible for compiling and disseminating the Government Financial Statistics (GFS). Data on the general government operations include state governments but exclude data on the operations of the extra-budgetary funds, local governments, and social security funds. There is also scope to improve the analytical usefulness of the presentation of the fiscal accounts from which GFS are derived, such as the classification of government expenditure between developmental/non-developmental and plan/non-plan spending. The authorities are reviewing how they could meet their commitment, under the G-20 Data Gaps Initiative, on reporting quarterly consolidated general government data by June 2021.

4. 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, the RBI’s survey, the monetary survey, liquidity aggregates (outstanding amounts), interest rates, exchange rates, foreign reserves, and results of government securities auctions. In 2011, the RBI started publishing a weighted-average lending interest rate and other lending rates at annual frequency. The frequency and quality of data dissemination have improved substantially in recent years. The RBI reports data on several series of the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs).

5. The RBI reports monetary data to STA with substantial delays and in non-standard format. The RBI also provides “test” data using the standardized reporting forms. However, the test data do not contain sufficient details (e.g., instrument, currency and counterparty sector breakdowns) to construct a complete and analytically useful picture of India’s financial sector that is also consistent with the guidelines provided in the Monetary and Financial Statistics Manual. In addition, data reported cover depository corporations only, and data on other financial corporations such as insurance corporations, pension funds, and investment funds are not covered.

6. Financial sector statistics: As for reporting of financial soundness indicators (FSIs), all 12 core and 11 encouraged FSIs for deposit takers as well as three FSIs for real estate markets are reported on a quarterly basis. FSIs for other financial corporations, nonfinancial corporations, and households are not reported.

7. External sector statistics: The concepts and definitions used to compile balance of payments statistics are broadly in line with the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). However, trade data have valuation, timing, and coverage problems. Data on imports of goods in the balance of payments are registered in c.i.f. prices while the BPM6 requires the f.o.b. pricing. Data on trade in goods prices, volumes, and composition are not regularly available on a timely basis. External debt statistics are available on a quarterly basis with a one quarter lag. Estimates of short-term external debt are presented 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 BPM6 and these data are disseminated within three months of the reference period in respect of quarterly data.1 Coverage of direct investment positions data is hampered by the absence of appropriate legal or institutional authority. India disseminates monthly the Data Template on International Reserves and Foreign Currency Liquidity as prescribed under the SDDS. More up-to-date information on certain variables, such as total foreign reserve assets, 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.

India: Table of Common Indicators Required for Surveillance

(As of October 2, 2019)

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

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

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.

For the states, limited details regarding the provisional accounts for FY2018/19 are available. Data for a few states is missing.

Details on central government expenditures for FY2018/19 and recent months is not yet available.

Including currency and maturity composition.


The IIP as published by the RBI values equity liabilities at acquisition cost, while the Fund uses market prices, resulting in substantial differences.