RBI using alternative data sources for economic insights: Shaktikanta Das

World from moving from 'era of data scarcity to abundance', says central bank governor

The Reserve Bank of India (RBI) is using “vast computing power” and alternative data sources for analysis and economic insights, said Governor Shaktikanta Das on Friday.

“We are conscious that we are moving from an era of data scarcity to data abundance. The volume of digital data stored as well as the storage capacity are growing at an exponential pace, bringing forth new challenges along with new opportunities,” he said in Mumbai at the 18th Statistics Day Conference organised by the Department of Statistics and Information Management.

“Global efforts are expected to culminate in new global standards for compilation of macroeconomic statistics, especially for national accounts and balance of payments. Our team in the Reserve Bank is closely tracking these developments. We are also making efforts to harness the availability of huge computing power and growing digital footprints to analyse measures of expectations, sentiment indicators and policy credibility measures from alternative data sources. Let me add that the use of alternative and unconventional data sources proved to be invaluable during the most severe phases of the Covid-19-related lockdowns and restrictions.”

Data management systems must keep evolving to keep pace with data sources. This includes focusing on eliminating noise and accurately capturing signals from high-frequency indicators. The RBI recognises the transition from an era of data scarcity to one of abundance. Digital data volumes and storage capacities are growing exponentially to bring both challenges and opportunities, he said.

The RBI’s focus is on improving capabilities in artificial intelligence and machine learning techniques, particularly in analysing unstructured textual data. “As we advance, it is crucial to address ethical considerations and eliminate biases in algorithms.”