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The International Monetary Fund (IMF) has assigned India a ‘C’ grade for the quality of its national accounts statistics, marking one of the lowest ratings for a major economy.
Possible Implications of the ‘C’ Grade
Weak Policymaking Precision: Faulty or outdated data affects fiscal planning, inflation targeting, monetary policy & sector specific interventions.
Reduced Credibility of Economic Numbers: Global investors, rating agencies, and financial institutions may view India’s data with greater caution.
Inaccurate Growth and Welfare Assessment: Misestimation of the informal sector may hide real growth performance, employment distress & household-level vulnerabilities.
Impaired Monetary Policy: If inflation is mismeasured, the RBI’s policy rates may not reflect true price pressures, affecting liquidity, borrowing, and growth.
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