Shaktikanta Das: Speech at Annual Statistics Day Conference
Speech by Mr Shaktikanta Das, Governor of the Reserve Bank of India, on the occasion of the
Annual Statistics Day Conference, Mumbai, 28 June 2019.
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I am honoured to inaugurate this year's Statistics Day Conference, the thirteenth in the series
organised by the Reserve Bank to commemorate the contributions of Professor Prasanta
Chandra Mahalanobis. While paying tribute to him, I would like to take this opportunity to review
some of the recent challenges in the field of statistics and in that context, to envision our future
plans.
2. Professor Mahalanobis's achievements in the field of statistics are pioneering and widely
acclaimed. In many ways, his contributions have pushed outwards the frontiers of human
understanding and endeavour. Very appropriately, therefore, he is regarded as the father of
modern statistics in India. Professor Mahalanobis was also a great institution builder. He will
always be remembered for founding the Indian Statistical Institute (ISI); for his path-breaking work
on nationwide sample surveys; and for providing the architecture of the second five year plan
(FYP) model of rapid industrialisation, among his many landmark contributions to nation building
in those early days of independence. Professor Mahalanobis was the recipient of the prestigious
award, the Padma Vibhushan. He also received international recognition, including as the
Honorary President of International Statistical Institute and Fellow of the Royal Society of London
for Improving Natural Knowledge.
3. Professor Mahalonobis was also the founder editor of the Indian Journal of Statistics
'Sankhya'. In the editorial of its first issue, Professor Mahalanobis summarised the ethos of the
discipline, and I quote: " ...the history of the word sankhyā shows the intimate connection which
has existed for more than 3000 years in the Indian mind between 'adequate knowledge' and
'number.' As we interpret it, the fundamental aim of statistics is to give determinate and adequate
knowledge of reality with the help of numbers and numerical analysis." These words would
inspire our deliberations on the theme of the Conference today, which is 'Statistics for the
Future'. The shared understanding that statistics is a 'key technology' in dealing with real life
problems is resonating across the world. Aptly, the 50th session of the United Nations Statistical
Commission (UNSC) held in March 2019 had 'Better Data Better Lives' as its leit motif.
4. The Reserve Bank's statistics and information management system has evolved over several
decades in response to demands for national level statistics of the highest quality and their
dissemination as a 'public good'. Over the years, more and more information is being compiled
and released in the public domain, including those data that form inputs in policy-making. With
India's growing integration with the global economy and the sophistication and complexity of
economic activity, information needs have exploded. This has thrown up challenges to
practitioners to exploit innovations in analytical tools so as to keep pace with the fast changing
dynamic. For instance, in the aftermath of the global financial crisis, statistical systems across
the central banks have undergone a paradigm shift. The focus is increasingly on monitoring of
risks in the financial sector, global linkages, and sectoral accounts in terms of analysis of
vulnerabilities, interconnectedness and spillovers. At the same time, information management
and dissemination has become technologically more advanced, with an emphasis on higher
frequency, granularity, better validation and integration into multi-purpose and structured data
production processes. In the Reserve Bank too, we propose to leverage our new age data
warehouse to support a granular data access lab to facilitate research, and a sandbox
environment for evaluating regulatory tools.
5. Let me turn to some other modern-day challenges confronting professional statisticians, in the
Reserve Bank as also outside the Bank. Big data is the new buzzword in the world of statistics,
and it has already started changing the way the world views itself. Corporations are making large
investments to predict the behaviour of consumers by exploiting the advances made in the field
of data analytics. This information technology revolution has also created problems of plenty,
underscoring the need for rigorous processes of classification, aggregation and analysis. Given
the large amount of information, extracting 'signals' and ignoring 'noise' is vital in the productive
use of new age technologies for analytical needs and policy decision support. Big data analytics
are being increasingly employed to assess food inflation, to develop risk profiles and stress
scenarios for the corporate sector and to conduct sentiment analysis with artificial intelligence
and machine learning techniques.
6. In recent times, there have been animated discussions on the precision of statistical methods.
The doctrine - even tradition - of statistical significance in scientific research has come under
some cloud for its veracity and the journal American Statistician published a special edition on
this issue earlier this year. Critics allege that these tests are susceptible to manipulation in order
to make desired results significant, and undesired results non-significant. Further, some
important results may be discarded at the conception level itself just because they are highly
unlikely. Similarly, an opportunity to cherry-pick variables is available. In other words, correlations
can conveniently be extended to establish spurious causality. In this context, do's and don't's
have been cited: 'don't say statistically significant' is one of them. Yet, as the global financial
crisis demonstrated, tail risks materialised and the world was not the same again. These
lessons inform our modelling of corporate financial risks on an ongoing basis. As the American
Statistician recommends, "Accept uncertainty. Be Thoughtful, Open, and Modest"; in short,
"ATOM."
7. In my view, in an era marked by the widespread usage of the internet and social media, there
is no substitute for rigorous statistical testing for establishing empirical regularities. In a deluge of
data and results, what is vital is not just knowing which facts warrant importance, but also which
are to be ignored, or even strongly refuted. Deviations from stylised facts and common sense
should be investigated, but backed by robust analysis, peer reviews of the data used and the
methods employed before deriving conclusions. So, the solution might not be less statistics, but
actually more of them, but used in a manner that they are supposed to be. In most countries
today, the profession of statistics is required to meet increasing analytical demands for decision
support. The rising demands on the profession, as pointed out recently by the US Bureau of
Labour Statistics, speak for the public's expectations about and reliance on the quality of
statistics, statistical methods and the statistician. In the Reserve Bank, we will continue to refine
the methodologies used for forecasting and assessment of macroeconomic developments on an
ongoing basis. Research and analytics using cutting edge techniques will be pursued and in
particular, nowcasting of growth and inflation will be further strengthened.
8. I am glad to note that renowned statisticians like Professor T.C.A. Anant, Professor T.J.Rao
and Professor Srikanth Iyer have accepted our invitation and agreed to share their views on the
theme of the Conference. We look forward to Professor Anant's thoughts on the challenges for
statisticians in the context of the United Nations' Sustainable Development Goals (SDGs) as part
of our commitment to the G20 process. The Reserve Bank has been conducting several surveys
to provide forward-looking inputs for policy purposes. In this context, Professor Rao's guidance
will be extremely valuable; moreover, he has had a long-standing relationship with the Bank in the
Technical Advisory Committee on Surveys. We are also eager to listen to Professor Iyer on
Random Connection Models that help in reducing dimensions, compressing information and
designing efficient algorithms in the era of Big Data.
I am also happy to learn that experts such as Dr. Subrata Sarkar, Dr. D.V.S.Sastry, Shri
D.K.Joshi and Dr.Bornali Bhandari will discuss the research work done and the future research
agenda with young researchers in the afternoon session. Their expertise would immensely help
our young professionals in setting their own goals.
9. I wish all participants the very best for today's conference. I hope your deliberations will keep
burning the flame of knowledge that illuminates human endeavour.
Thank you!