Data on unorganised sector inadequate, says Urjit Patel

Praises central government for monetary policy, taxation reforms

Information on India’s unorganised sector is not adequate, and on many other issues the Reserve Bank of India (RBI) has to conduct its own researches to arrive at good policy decisions, according to Governor Urjit Patel.

He praised the government for far-reaching reforms in monetary policy formation, taxation, and resolution of stressed assets. These steps show the government’s commitment to sound public policy by establishing institutions and ceding power to them to perform functions.

In his address at the convocation ceremony at Meghnad Desai Academy of Economics on Friday, Patel said a central banker needs to think fresh in an ever changing world, and the central bank resorts to surveys and analysis to understand household and firm behavior.

Referring to reforms, he said, “One cannot and should not underestimate the sagacity and uncommon courage of the government to undertake reforms that can only be described as truly transformative. These will shape, for the better, our economic evolution in the years and decades to come.”

“However, the need now is to understand micro-level price formation dynamics in new dimensions such as ecommerce, digital transactions and big cross sectional data. This applies to domains such as banking, non-banking financial intermediation, payments, currency management and financial inclusion as well,” the governor said, adding that in the absence of research, “policy choices could yield sub-optimal outcomes at times.”

“There is an acute information deficit regarding the unorganised sector in India, despite its significant role in income and employment generation,” he said. However, the absence of official or non-official statistics has not prevented economists from conducting survey-based studies to help understand the underlying dynamics.

These steps are unprecedented in the history of our nation, in that they show the Government’s commitment to sound public policy by establishing institutions and ceding power to them to perform functions vital for securing and entrenching macroeconomic and financial stability, he added.

“ONE CANNOT AND SHOULD NOT UNDERESTIMATE THE SAGACITY AND UNCOMMON COURAGE OF THE GOVERNMENT TO UNDERTAKE REFORMS THAT CAN ONLY BE DESCRIBED AS TRULY TRANSFORMATIVE. THESE WILL SHAPE, FOR THE BETTER, OUR ECONOMIC EVOLUTION IN THE YEARS AND DECADES TO COME” URJIT PATEL, Governor, Reserve Bank of India