Inaugural Address by Governor, Shri Shaktikanta Das
at the Statistics Day Conference on June 29, 2022
It is a privilege to inaugurate the annual 'Statistics Day Conference'
of the Reserve Bank. This annual event is taking place today in the
physical mode after a gap of two years. On this day, the nation
commemorates the contributions of Professor Prasanta Chandra
Mahalanobis, one of the pioneers in the discipline of statistics and a
true visionary. Professor C. R. Rao, a great statistician and a student
of Professor Mahalanobis described him as "a physicist by training, a
statistician by instinct and an economist by conviction"1.
2. Professor Mahalanobis is regarded as the father of modern
statistics in India. He established the Indian Statistical Institute (ISI) in
1931 and was also responsible for the establishment of the official
statistical system in our country, including the large-scale nationwide
sample surveys. He displayed keen interest in development of
innovative statistical techniques for studying questions pertaining to
welfare of the people. As such, his work highlighted the universal
applicability of statistical methods in major scientific and social
disciplines - agriculture, meteorology, statistical quality control,
economics, anthropology and demography, to name a few.
3. Professor Mahalanobis was appointed Honorary National
Statistical Adviser to the Union Cabinet in 1949 and was the Chairman
of the first National Income Committee formed in 1950. The second
Five-year plan was based on his model of economic development. He
received India's second highest civilian award, the Padma Vibhushan,
in 1968.
4. As I pay tribute to Professor Mahalanobis, I propose to touch
upon the unique challenges faced by the discipline of statistics in
these uncertain times, and the evolving expectations from the
discipline and practicing statisticians. The importance of statistics in
public policy is well understood. In the face of high uncertainty brought
on by the COVID-19 pandemic, the discipline of statistics found itself
in greater spotlight. This unprecedented global phenomenon has
tested human endeavour in multiple facets and magnitude. The
lockdowns in various countries, including our own, posed severe
challenges to the compilation and availability of data relating to the
spread of the pandemic and its impact on various economies. The
world urgently needed solutions to a problem it had never seen
before.
5. Public authorities, healthcare personnel, scientists and above
all, the people eagerly looked for hard data from various sources such
as hospitals, municipal authorities, etc. on the spread of the
pandemic. Very soon, data from these sources got updated on a near-
real time basis in an accessible manner. Statisticians collaborated
with healthcare authorities to monitor the age-specific, spatial and
temporal dimensions of the pandemic. This enabled the authorities to
better respond to the healthcare requirements of those affected.
6. As statisticians provided new techniques and insights for
modelling without precedence, the importance of the discipline was
reaffirmed. Official statistics became a cornerstone of the responses
to the short- and long-term consequences of the pandemic. The
pressing need for hard data during the crisis accelerated innovation
and sharing of experiences, especially in production, dissemination
and use of statistics, shift towards the use of new data sources,
adoption of new statistical methods and deployment of experimental
statistics and dashboards.2
7. During this period of unprecedented uncertainty, closer
monitoring of economic activity demanded immediate attention as the
massive shock reverberated across the global economy. The
compilation of aggregates from electronic systems were least
affected; but some channels used in compiling macroeconomic and
micro-level data were hampered by social distancing norms and
lockdowns. Across the world, the authorities responsible for collection
and dissemination of real sector statistics started exploring collection
of data through alternate modes. For example, in many socio-
economic and business surveys, traditional face-to-face interviews
were replaced by telephonic interviews and on-line surveys.
According to a survey conducted by the United Nations Statistics
Division (UNSD) and the World Bank, over 95 per cent of National
Statistical Offices (NSOs) had partially or fully stopped face-to-face
data collection in May 20203. This has, of course, been gradually
restored as economies opened up. India was not immune to this
impact. The Ministry of Statistics and Programme Implementation
was compelled to publish imputed figures for consumer price index
(CPI) for two consecutive months during the first wave of the
pandemic in 2020 due to immense difficulty in collection of prices for
many items.
8. The statistical innovations arising out of the COVID-19
disruption will have long-lasting benefits. At the same time, the
upheaval also posed challenges to statistical agencies to build more
public trust in the resulting statistics. While new data sources open up
opportunities for official statistics, it also raises issues for the
discipline. Development of proper data quality framework and
ensuring data privacy and data security has assumed top priority. Not
surprisingly, this was a central theme for the recently held
International Association for Official Statistics Conference in April
20224.
9. Central banks on their part are both producers and users of
statistics for policy actions as well as for assessing the outcomes of
their actions. They also need to establish stronger communication of
their policies and actions in such turbulent times. Thus, central banks
too had to cope with all these challenges by focussing on alternative
indicators and data sources for monitoring the effects of the pandemic
in all its dimensions. The Reserve Bank of India refocussed its
statistical endeavours during the pandemic to ensure the continuity of
its mission. The RBI's past efforts in streamlining of data flow,
investment in technology and continuous engagement with regulated
entities paid dividends. In addition to some shift in modes of survey
data collection, more consistency checks were put in place and
sample follow-up revisits were introduced to ensure sanctity of data.
Innovative solutions were found in terms of channels of data
collection, validations and dissemination for policy inputs as well as
for meeting various international reporting commitments.
10. Statistical modelling and forecasting fundamentally depend on
deriving information from precedents but the pandemic compelled
statisticians to forecast in the absence of precedence. Even short-
term forecasting has become a challenge for central banks in the
aftermath of the pandemic. Large shifts in economic conditions, as
during the pandemic, introduce structural breaks in statistical models.
At the same time, the assumptions underlying these models also keep
changing during uncertain times. Different solutions have been
proposed by researchers and recent trends highlight a few strands of
adjustments in standard forecasting models to deal with COVID-19
disruptions. One must use all these available options to check the
forecast accuracy before zeroing in on any particular technique.
Further, the forecasting models will require timely updates to factor in
the latest developments in the economy.
11. The experience of the last two years has made us mindful of the
data gaps that remain, though ensuring standardisation of
methodologies in the compilation of various national aggregates have
stood us in good stead. Our endeavour has been to follow global
standards and best practices, some of which are still evolving. In
parallel to these developments, more indices, sub-indices and other
statistics have also come to the forefront as countries strive to achieve
higher standard of living, and attempt to monitor their progress across
multiple dimensions. Various forms of Human Development Indices,
Happiness Indices and Inequality indices have been proposed in the
literature and are now compiled by various national and international
agencies.
12. Given its vastness and geographical diversity, India requires
regional dimensions of national indicators. We should aim at
enhanced granularity, regularity and better validation. In the Reserve
Bank, we treat information as a 'public good'. We envision to keep
calibrating our information management systems to the needs and
expectations of various stakeholders. As I have already stated, we
should also tap alternate data sources, and consider ways and means
of fitting them in the existing analytical frameworks.
13. The world has responded to the devastating impact of the
COVID-19 pandemic through remarkable determination, strong
human spirit and scientific efforts. This response is taking place in a
period when we are also facing long term challenges of climate
change, with its unusually complex dynamics. It poses new
challenges to central banks, regulators and supervisors. The risk
assessment methods and models for analysing climate-related risks
are, at present, limited by lack of usable data. Work is on for
identifying and bridging these data gaps5. The new phase6 of G-20
Data Gaps Initiative (DGI) proposes climate change as a major focus
area to address data gaps that have been identified as crucial for
macroeconomic policy making and micro-financial stability.
14. The proliferation of internet has led to an explosion in the
availability and demand for data. Businesses are making large
investments to predict the behaviour of consumers by exploiting the
advances made in the field of data analytics. Amidst this inundation
of data and inferences, it is important that peculiarities and
nonconformities are subjected to robust statistical analysis and peer
review before deriving conclusions.
15. In other words, statistics should focus on laying down the
pathway towards proper interpretation in the present world of data
abundance. This would facilitate more informed decision making,
clarity in communication from decision makers and formation of
rational expectations from market participants.
16. In most countries today including our own, there are greater
demands from the profession of statistics for policy inputs and
decision making. Such rising demands on the profession necessitate
robust quality of statistics and statistical methods. I would encourage
the statisticians in the Reserve Bank of India, as well as those outside
the Bank, to make full use of the opportunities available by way of
advances in statistical methods. We are living in an era where
computing power practically has no boundaries. This is an opportunity
as well as a challenge for statisticians across the world.
17. I earnestly hope that today's deliberations will inspire our
officers, especially the younger officers, to ask pertinent questions
and rise to the challenges of the post-pandemic world. Their
endeavour should be to innovate solutions keeping in mind the
Mahalanobis Dictum7 : "Statistics must have a clearly defined
purpose, one aspect of which is scientific advance and the other,
human welfare and national development."
18. My best wishes for productive deliberations in today's
conference.
Thank you.