Modernise data system
Economic data must be released during market hours
Last week, the National Statistical Office of the Union government released the gross domestic product (GDP) estimates for the second quarter of this fiscal year. As usual, the data was released well after the trading day had closed, at 5:30 pm. On the same day, the latest print for the core sector was made public — that too after the close of business. This is followed as a norm with many important data results. Inflation numbers too tend to be issued very late. The government seems to believe that it is necessary to do so in order to minimise trading around the new information. But is that how a mature economy behaves? The reasons behind such decisions should be re-examined, and a rational approach be taken. Such analysis would no doubt demonstrate that timely data release is far more in the national interest than the current procedures. Rather than preventing speculation around data releases, the current system simply disadvantages Indian investors. Most important markets elsewhere are open at 5:30 pm IST, and thus everyone in the world can adjust to new information before Indian investors do. Surely creating a systemic disadvantage for the Indian financial markets is not the intent of the government.
One major problem of releasing data so late in the day is that proper analysis cannot be conducted by the news media, either by daily newspapers that go to press at night, or by primetime news bulletins on television. Aside from important and regular data like GDP numbers, even vital longer-term data releases such as the Periodic Labour Force Survey, or PLFS, were released late in the day, causing them to be barely covered in the news. The government’s statistical organs are not the only agencies responsible for this error in communication strategy. The Reserve Bank of India (RBI) is no better. It released its state finance report so late this year that most newspapers could not even cover it the next day. In a year when state finances are in stress, this was clearly not the best thing to do.
The fact that such caution about data releases is completely unwarranted is demonstrated by one regular decision most likely to move the markets, the RBI’S monetary policy, is indeed made public during working hours. That includes a lengthy press conference. This has led to no negative consequences at all. For that matter, the Union Budget too has been moved from the traditional time of 5:30 pm — set during colonial rule to coincide with the presentation of the United Kingdom’s budget in Westminster — to earlier in the day. If traders can be trusted to respond properly to the information contained in the Union Budget, surely timely GDP numbers are not capable of destabilising the system? Every other data release and report from the Government of India and the RBI should follow the same rules as the Union Budget and monetary policy. Ideally, in fact, wherever necessary they should be accompanied by a press conference in which the details are elucidated and the statisticians’ and officials’ guidance about the data is made clear. Efforts should also be made to standardise the format in which the data is released. A uniform system of data in English should be required, including from state governments. State finances do not get the attention they deserve because of a lack of uniformity.