Reserve Bank of India (RBI) Governor Shaktikanta Das on April 4 said the central bank’s GDP projections are based on the official statistics prepared by the Central Statistics Office (CSO).
A group of over 100 economists had gone public with their reservations on the GDP and other key data points in March in light of the frequent revisions in the way the numbers are computed.
Even Raghuram Rajan, India’s former RBI governor had echoed concerns raised by the other economists on the quality of economic data in India, saying the lack of jobs data and the perceived unreliability of the GDP data could pose challenges to policymakers and undermine investor confidence.
“We need better data and better confidence in data,” he said. “You can’t operate such a large economy on the basis of data, which nobody knows is correct or not,” Rajan had said in a recent interview with Moneycontrol.
Das, a bureaucrat-turned-central banker, agreed there is a political debate on the issue, but declined any further comment.
The central bank is monitoring the fiscal situation and will continue to watch the space closely, Das said.
Das said even though some banks have cut rates recently, more needs to be done for effective transmission of rates to the end-borrowers.
He also said the RBI has infused liquidity into the system through various instruments and affirmed to use every other instrument available with it in the future as well.
At the first bi-monthly policy review for fiscal 2020, the monetary policy committee voted for a 0.25 percent rate cut, its second such action in consecutive policies since Das took over last December.
(With PTI inputs)