Changing over a decade-old practice of releasing the closely watched retail inflation and factory output data at 5:30 pm on the 12th of every month, the Ministry of Statistics and Programme Implementation (MoSPI) on Tuesday announced new timings for data released at 4 pm. The Ministry said the revision in data release timings is being done “to provide more time on the day of release to access CPI (Consumer Price Index) & IIP (Index of Industrial Production) data. It also said the new release time aligns with the closing hours of major financial markets in India. However, some financial markets like the government bond markets and the foreign exchange futures, which are sensitive to inflation data, remain open till 5 pm and hence, may be sensitive to data released during market hours. Why was the data release timing kept at 5:30 pm earlier? Back in 2013, there were some reports of data getting leaked before the official release time that had led to many representations to the Ministry to keep the timing of the data release, especially retail inflation data, after the market hours. The retail inflation and IIP data used to be released around 11-11:30 am on the 12th of every month till June 2013. Retail inflation data, which is a closely watched indicator for the Indian economy, would then become a crucial input for trading and taking positions in markets, especially in the forex and government bond markets. After the representations were made about data leaks at that time, the Ministry then changed the release time for the retail inflation and IIP data to 5:30 pm from July 2013 onwards. The timing was changed keeping in mind that the forex and government bond markets close at 5 pm. While retail inflation data has always been released on a monthly basis, the wholesale inflation data was released weekly till December 2012. Now, it's released on the 14th of every month around noon. What is the new change in data release timing? While announcing the change in data release timing for retail inflation and IIP on Tuesday, the Ministry said it will provide more time on the day of release to access data. “The CPI & Index of Industrial Production plays a critical role in economic policy and financial markets by reflecting inflationary trends across rural, urban, and combined sectors and industrial growth in the country,” it said. Currently, the CPI and IIP are released by the MoSPI on the 12th of each month at 5:30 pm. If 12th is a holiday, then CPI data is released on the next working day and IIP is released on the previous working day if 12th falls on a holiday. The data release in November for both CPI and IIP will be made at 4 pm. The Ministry stated that the new release time aligns with the closing hours of major financial markets in India, “ensuring that CPI data dissemination does not interfere with active trading”. “This adjustment also adheres to MoSPI's commitment to transparency and accessibility in data dissemination,” it said. Analysts, however, point to the fact that while the stock markets may close by the 4pm release time, some financial markets such as the government bond and the foreign exchange markets, which are also sensitive to inflation data releases, remain open till 5 pm, The suggestion, therefore, is that the release time of 4 pm still does means the data could be sensitive, given the extended timings of the bond market and the currency market. What is the significance of CPI and IIP data? Consumer Price Indices (CPI) measure changes over time in the general level of prices of goods and services that households purchase for consumption. CPI is widely used as a macroeconomic indicator of inflation and as a tool by governments and central banks for inflation targeting and for monitoring price stability, and as deflators in the national accounts. Inflation is the rate at which prices for a basket of selected goods and services rise over a period of time and it is calculated by measuring year-on-year change in CPI, that is, current month CPI over CPI of same month of last year. At present, the CPI (combined), which is the most closely watched indicator for retail inflation, is linked to base year 2012 since the time of release in January 2015. Before that, it was linked to the base year 2010. The IIP data measures the quantum of changes in the industrial production in an economy and captures the general level of industrial activity in the country. It is measured as an index number to value the short term changes in the volume of production of a basket of industrial products during a given period with respect to the base period, which is 2011-12 at present. It covers industrial growth across three sectors - Mining, Manufacturing and Electricity - and different use-based categories, that is, basic goods, capital goods, intermediate goods, consumer durables and consumer non-durables. The IIP is watched as a short-term indicator for industrial growth till the release of the Annual Survey of Industries and National Accounts Statistics.
