Financial Daily from THE HINDU group of publications
Tuesday, Feb 05, 2002
Financial Daily from THE HINDU group of publications Tuesday, Feb 05, 2002 |
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Money & Banking
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NBFCs Industry & Economy - Economy CSO in talks with RBI on obtaining data from NBFCs Our Bureau
NEW DELHI, Feb. 4 THE Central Statistical Organisation (CSO) is working out an arrangement with the Reserve Bank of India (RBI) to obtain timely data on the performance of non-banking finance companies (NBFC), which, it reckons, would generate more reliable advance estimates of real GDP growth. The CSO has been under flak for undertaking significant revisions in its estimates of gross domestic product (GDP) growth. For 2000-01, the CSO had, in its `advance' estimate released in January 30, 2001, pegged GDP growth at six per cent, which was subsequently scaled down to 5.2 per cent in its `revised' estimate of June 29 and further to four per cent in the `quick' estimate of January 31, this year. The substantial downward revision of two percentage points was mainly due to the huge difference in the growth estimates for `financing, insurance, real estate and business services' - from 9.6 per cent and 9.1 per cent in the `advance' and `revised' estimates to a mere 2.9 per cent in the latest `quick' estimate. A senior CSO official said that the huge variation between the advance and quick estimates of growth for the financial sector was because of the absence of reliable data for NBFCs. "Even at the time we released the revised estimates in late June, we did not have access to the financial performance of NBFCs like IDBI, ICICI, UTI, etc. It is only after these institutions came out with their annual accounts for 2000-01 could we arrive at a realistic estimate of their growth,'' he told Business Line. The official said that, unlike in the case of banks, which report their performance regarding deposit growth, credit offtake, etc on a monthly basis to the RBI, there is no such mechanism operating with respect to NBFCs now. "As a result, we are having to use the data for banks as a proxy for estimating the growth of the financial sector as a whole. This methodology has clearly proved to be inadequate because the performance of NBFCs has not necessarily mirrored that of banks, especially in recent times. With UTI and IDBI not posting good results and other NBFCs saddled with large non-performing assets, we have estimated the financial services sector to have registered a negative growth of 2.2 per cent last year,'' he added. The official said that "We are talking to the RBI to work out a system wherein the NBFCs are also required to submit monthly reports on their performance''. This would help in generating a more authentic GDP growth figure even at the `advance' estimate stage. "We do not have the power to ask these institutions to furnish their data. This is something that only the RBI can do,'' he added.
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