Abstract
INDIA
Title Page
INDIA
STAFF REPORT FOR THE 2022 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX
November 4, 2022
Prepared By
Contents
FUND RELATIONS
INFORMATION ON THE ACTIVITIES OF OTHER IFIS
STATISTICAL ISSUES
Fund Relations
(As of September 30, 2022)
Membership Status:
Joined December 27, 1945; Article VIII.
General Resources Account
| SDR Million | % Quota | |
| Quota | 13,114.40 | 100.00 |
| Fund Holdings of Currency (Holdings Rate) | 9,354.29 | 71.33 |
| Reserve Tranche Position | 3,770.41 | 28.75 |
| Lending to the Fund | ||
| New Arrangements to Borrow | 59.22 |
| SDR Million | % Quota | |
| Quota | 13,114.40 | 100.00 |
| Fund Holdings of Currency (Holdings Rate) | 9,354.29 | 71.33 |
| Reserve Tranche Position | 3,770.41 | 28.75 |
| Lending to the Fund | ||
| New Arrangements to Borrow | 59.22 |
SDR Department:
| SDR Million | % Allocation | |
| Net cumulative allocation | 16,547.82 | 100.00 |
| Holdings | 13,658.43 | 82.54 |
| SDR Million | % Allocation | |
| Net cumulative allocation | 16,547.82 | 100.00 |
| Holdings | 13,658.43 | 82.54 |
Outstanding Purchases and Loans: None
Financial Arrangements:
| Type Date | Date of Arrangement | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
| Stand-By | 10/31/91 | 06/30/93 | 1,656.00 | 1,656.00 |
| Stand-By | 01/18/91 | 04/17/91 | 551.93 | 551.93 |
| EFF | 11/9/81 | 05/01/84 | 5,000.00 | 3,900.00 |
| Type Date | Date of Arrangement | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
| Stand-By | 10/31/91 | 06/30/93 | 1,656.00 | 1,656.00 |
| Stand-By | 01/18/91 | 04/17/91 | 551.93 | 551.93 |
| EFF | 11/9/81 | 05/01/84 | 5,000.00 | 3,900.00 |
Projected Payments to Fund
(SDR million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 12.87 | 58.20 | 58.23 | 58.17 | 58.20 |
| Total | 12.87 | 58.20 | 58.23 | 58.17 | 58.20 |
| Forthcoming | |||||
| 2022 | 2023 | 2024 | 2025 | 2026 | |
| Principal | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Charges/interest | 12.87 | 58.20 | 58.23 | 58.17 | 58.20 |
| Total | 12.87 | 58.20 | 58.23 | 58.17 | 58.20 |
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 non-transferability 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 nonresident relatives. The Executive Board has not approved these restrictions.
Article IV Consultation:
The previous Article IV consultation discussions were held in July 2021. The Staff Report (IMF Country Report No. 21/230) was discussed by the Executive Board on September 17, 2021.
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 IV 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:
World Bank: http://www.worldbank.org/en/country/india/overview
Asian Development Bank: Asian Development Bank and India: Fact Sheet (adb.org)
Statistical Issues
(As of October 1, 2022)
The IIP as published by the RBI values equity liabilities at acquisition cost, while the Fund uses market prices, resulting in substantial differences.
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is broadly adequate for surveillance. However, upgrading and expanding statistics would help policy formulation. | |
| 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, an indirect -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, major discrepancies between GDP by activity and GDP by expenditure, and the lack of official seasonally-adjusted quarterly GDP series complicate analysis. There are long-standing deficiencies in employment data: they cover the formal sector, which accounts for a small segment of the labor market, as well as the informal sector, and are available only with a substantial lag. | |
| Price statistics: In early 2011, an all-India Consumer Price Index (CPI) with updated weights was released, which covered both rural and urban India, with 2009/10 as a base year. In addition, separate corresponding urban and rural CPI series were published. In early 2015, the CPI weights were updated again using 2011/12 expenditure data and the CPI series was revised from January 2015. The CPIs are published with a lag of about one month. There are also four other 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 which is based on weights from 2016, the other indices are based on weights that are over ten years old. The weights for the existing wholesale price index (WPI) are from 2011/2012. A recent TA mission supported the authorities in the development of a new producer price index (PPI) for agricultural and industrial activities, with a target release date of December 2023. The new PPI will better align with national accounts concepts and therefore allow for more accurate estimation of real output in India. A quarterly House Price Index (HPI) is published by the Reserve Bank of India (RBI) and is based on transaction-level data received from the housing registration authorities in ten major cities. This has helped surveillance in this area, though geographic coverage remains limited, and price data for commercial real estate are not available. The Labour Bureau, Ministry of Labour and Employment have 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). Although, under the G-20 Data Gaps Initiative, authorities engaged both on expanding the GFS reporting coverage to include state government and to compile quarterly consolidated general government data these have not been formalized, discussions on the general government operations is yet to include 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. | |
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 mobile and internet banking, mobile money, gender-disaggregated data, and 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). The RBI reports monetary data to STA 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. The RBI reports 13 core Financial Soundness Indicators (FSIs) and nine additional FSIs for deposit takers as well as one core and two additional FSIs on real estate markets on a quarterly basis for publication on the IMF’s FSI website. The RBI could improve its coverage of the additional FSIs to include other sectors, notably, other financial corporations, nonfinancial corporations, and households. |
|
| Financial sector data: 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. | |
| 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 available quarterly (and includes 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. | |
| II. Data Standards and Quality | |
| Subscriber to the Fund’s Special Data Dissemination Standard (SDDS) since December 1996. Uses flexibility options on the timeliness of employment, unemployment, and general government operations. | A Report on Observance of Standards and Codes—Data Module; Response by the Authorities, and Detailed Assessments Using the Data Quality Assessment Framework was published on April 2, 2004. |
The IIP as published by the RBI values equity liabilities at acquisition cost, while the Fund uses market prices, resulting in substantial differences.
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is broadly adequate for surveillance. However, upgrading and expanding statistics would help policy formulation. | |
| 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, an indirect -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, major discrepancies between GDP by activity and GDP by expenditure, and the lack of official seasonally-adjusted quarterly GDP series complicate analysis. There are long-standing deficiencies in employment data: they cover the formal sector, which accounts for a small segment of the labor market, as well as the informal sector, and are available only with a substantial lag. | |
| Price statistics: In early 2011, an all-India Consumer Price Index (CPI) with updated weights was released, which covered both rural and urban India, with 2009/10 as a base year. In addition, separate corresponding urban and rural CPI series were published. In early 2015, the CPI weights were updated again using 2011/12 expenditure data and the CPI series was revised from January 2015. The CPIs are published with a lag of about one month. There are also four other 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 which is based on weights from 2016, the other indices are based on weights that are over ten years old. The weights for the existing wholesale price index (WPI) are from 2011/2012. A recent TA mission supported the authorities in the development of a new producer price index (PPI) for agricultural and industrial activities, with a target release date of December 2023. The new PPI will better align with national accounts concepts and therefore allow for more accurate estimation of real output in India. A quarterly House Price Index (HPI) is published by the Reserve Bank of India (RBI) and is based on transaction-level data received from the housing registration authorities in ten major cities. This has helped surveillance in this area, though geographic coverage remains limited, and price data for commercial real estate are not available. The Labour Bureau, Ministry of Labour and Employment have 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). Although, under the G-20 Data Gaps Initiative, authorities engaged both on expanding the GFS reporting coverage to include state government and to compile quarterly consolidated general government data these have not been formalized, discussions on the general government operations is yet to include 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. | |
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 mobile and internet banking, mobile money, gender-disaggregated data, and 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). The RBI reports monetary data to STA 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. The RBI reports 13 core Financial Soundness Indicators (FSIs) and nine additional FSIs for deposit takers as well as one core and two additional FSIs on real estate markets on a quarterly basis for publication on the IMF’s FSI website. The RBI could improve its coverage of the additional FSIs to include other sectors, notably, other financial corporations, nonfinancial corporations, and households. |
|
| Financial sector data: 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. | |
| 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 available quarterly (and includes 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. | |
| II. Data Standards and Quality | |
| Subscriber to the Fund’s Special Data Dissemination Standard (SDDS) since December 1996. Uses flexibility options on the timeliness of employment, unemployment, and general government operations. | A Report on Observance of Standards and Codes—Data Module; Response by the Authorities, and Detailed Assessments Using the Data Quality Assessment Framework was published on April 2, 2004. |
The IIP as published by the RBI values equity liabilities at acquisition cost, while the Fund uses market prices, resulting in substantial differences.
India: Table of Common Indicators Required for Surveillance
(As of October 1, 2022)
Any reserve assets that are pledged of 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 and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); bi-weekly (BW); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
India: Table of Common Indicators Required for Surveillance
(As of October 1, 2022)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
| Exchange Rates | 10/01/22 | 10/01/22 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 09/23/22 | 09/30/22 | W | W | W |
| Reserve/Base Money | 09/23/22 | 09/28/22 | W | W | W |
| Broad Money | 09/09/22 | 09/22/22 | BW | BW | BW |
| Central Bank Balance Sheet | August 2022 | 09/16/22 | W | W | W |
| Consolidated Balance Sheet of the Banking System | 09/09/22 | 09/22/22 | BW | BW | BW |
| Interest Rates2 | 10/01/22 | 10/01/22 | D | D | D |
| Consumer Price Index | August 2022 | 09/12/22 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2021/22 | 02/16/22 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3–Central Government | August 2022 | 09/30/22 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Apr-Jun 2022 | 09/30/22 | Q | Q | Q |
| External Current Account Balance | Apr-Jun 2022 | 09/29/22 | Q | Q | Q |
| Exports and Imports of Goods and Services | August 2022 | 09/14/22 | M | M | M |
| GDP/GNP | Apr-Jun 2022 | 08/31/22 | Q | Q | Q |
| Gross External Debt | Apr-Jun 2022 | 09/29/22 | Q | Q | Q |
| International Investment Position6 | Apr-Jun 2022 | 09/30/22 | Q | Q | Q |
Any reserve assets that are pledged of 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 and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); bi-weekly (BW); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).
India: Table of Common Indicators Required for Surveillance
(As of October 1, 2022)
| Date of latest observation | Date received | Frequency of Data7 | Frequency of Reporting7 | Frequency of Publication7 | |
| Exchange Rates | 10/01/22 | 10/01/22 | D | D | D |
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 | 09/23/22 | 09/30/22 | W | W | W |
| Reserve/Base Money | 09/23/22 | 09/28/22 | W | W | W |
| Broad Money | 09/09/22 | 09/22/22 | BW | BW | BW |
| Central Bank Balance Sheet | August 2022 | 09/16/22 | W | W | W |
| Consolidated Balance Sheet of the Banking System | 09/09/22 | 09/22/22 | BW | BW | BW |
| Interest Rates2 | 10/01/22 | 10/01/22 | D | D | D |
| Consumer Price Index | August 2022 | 09/12/22 | M | M | M |
| Revenue, Expenditure, Balance and Composition of Financing3 – General Government4 | 2021/22 | 02/16/22 | A | A | A |
| Revenue, Expenditure, Balance and Composition of Financing3–Central Government | August 2022 | 09/30/22 | M | M | M |
| Stocks of Central Government and Central Government-Guaranteed Debt5 | Apr-Jun 2022 | 09/30/22 | Q | Q | Q |
| External Current Account Balance | Apr-Jun 2022 | 09/29/22 | Q | Q | Q |
| Exports and Imports of Goods and Services | August 2022 | 09/14/22 | M | M | M |
| GDP/GNP | Apr-Jun 2022 | 08/31/22 | Q | Q | Q |
| Gross External Debt | Apr-Jun 2022 | 09/29/22 | Q | Q | Q |
| International Investment Position6 | Apr-Jun 2022 | 09/30/22 | Q | Q | Q |
Any reserve assets that are pledged of 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 and local governments.
Including currency and maturity composition.
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Daily (D); weekly (W); bi-weekly (BW); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).