Scope of the data:
- Transactions coverage: The balance of payments covers all transactions between residents and non-residents.
- Geographical coverage: Data cover the territory of India.
- Unrecorded activity: Illegal transactions are not recorded.
Data are disseminated in millions of U.S. dollars and crores of rupees (one crore = 10 million) on the balance of payments showing:
- Exports and imports of goods and services.
- Receipts and payments for investment income and compensation of employees (from which data on net income receipts can be derived).
- Current transfers comprising official transfers and private transfers.
- The capital account, broken down into foreign investments, external assistance, external commercial borrowings, non-resident deposit flows, short-term capital and other capital.
- Monetary movements comprising IMF transactions and international reserves movements.
The data covers the entire economy. The data are compiled in accordance with the methodology set out in the fifth edition of the IMF's "Balance of Payments Manual".
For the most part, the Indian balance of payments statistics are compiled at market prices. The Balance of Payment is compiled in Indian rupees and the US dollar. Effective March 1993, the conversion of transactions from other currencies to Indian rupee is made by crossing monthly average spot buying and selling rate for US dollar in the foreign exchange market and the monthly average of cross rates of non-dollar currencies based on the London market.
The principle of valuation at the market price is generally adopted for recording BoP transactions. Recording of non-merchandise transactions is at the price reported by transactors to banks while putting through the financial transactions. Exports are valued on f.o.b. basis while imports are invoiced on c.i.f. basis. Investment transactions are recorded at actual market prices.
For the most part, transactions are recorded on a payments (cash) basis. Reinvested earnings, interest income on reserves and interest payments are recorded on an accrual basis. Exports are recorded when they leave India (drawn from the data from the DGCI&S), after allowing for certain timing and valuation adjustments.
Grossing/netting procedures are broadly in accordance with the fifth edition of the IMF's "Balance of Payments Manual". Most transactions in the current account are recorded on a gross basis and on a net basis in the financial account, separately for assets and liabilities.
Source data collection programs:
Data for India’s BALANCE OF PAYMENTS are obtained primarily as a by-product of ITRS i.e. the system of reporting of foreign exchange transactions undertaken by banks in fortnightly returns to RBI. These are supplemented by collection of information from other sources viz., Ministry of Finance, Ministry of Commerce, Directorate General of Commercial Intelligence & Statistics and financial institutions. Item-wise details are as under:
- Goods: the main source of data is the ITRS, supplemented by government sources and reporting of transactions by borrowing entities;
- Travel: Travel payments are based on foreign exchange remittances reported by banks under the ITRS, survey of expenditure by foreign tourists, data on tourist arrivals and sales/purchases of foreign currency to domestic tourists/ foreign tourists by money changers.
- Transportation: The main source of data is the ITRS i.e., reporting of receipts and payments in respect of transportation account by banks. This is supplemented with information collected from major airline and shipping companies in respect of payments abroad from their foreign accounts.
- Insurance: The ITRS reporting by banks is used along with the results of survey on freight and insurance components of exports.
- Government not included elsewhere: Data reported by banks and also information relating to receipts and payments on account of maintenance of embassies and diplomatic missions (based on government records) and offices of international institutions in India (RBI records).
- Miscellaneous: The main sources of data are foreign exchange receipts and payments reported by banks under ITRS and information collected from the National Association of Software and Services Companies (NASSCOM).
- Income: Compensation of employees: data reported by banks and information collected from software companies;
- Investment Income: Major data sources are ITRS and external commercial borrowings reporting system for banks while data in respect of reinvested earnings are based on the annual survey conducted by the Reserve Bank, and investment income receipts on official reserves on RBI’s own records.
- Transfers: Private transfers: the main source of data is the ITRS, supplemented with reporting on Non-resident deposits and gold imports.
- Official transfers: Data obtained from the Controller of Aid Accounts and Audit, Government of India and Embassy of USA in India.
- Capital Account:
- Direct Investment: Data reported by companies on equity flows, results of Annual Survey of Foreign Assets and Liabilities for reinvested earnings, and details of external commercial borrowings reported by companies.
- Portfolio investment: Data reported by custodians on inward and outward remittances on account of FII investment, reporting by companies raising ADRs/GDRs and also by mutual funds on funds raised though offshore funds.
- Loans: Data on external assistance received from Controller of Aid Accounts and Audit, external commercial borrowings reported by companies and reporting by banks on trade credits;
- Banking Capital: Data based on the periodic return filed by banks on foreign currency assets and rupee liabilities, supplemented by data on non-resident deposit liabilities.
- Reserve assets: Derived from the outstanding position of reserve assets based on RBI records.
Compilation practice- Source data statistical techniques:
- Goods: Imports data are compiled on the basis of reporting of all imports for which remittances have been effected through the banking channel. Coverage adjustment is, however, made to account for imports that are not paid for at all (e.g., grant component of external assistance utilized for imports) and imports that are not paid for through the banking channel viz., utilisation of loans raised through external commercial borrowings for imports, gold and silver brought in by the Indians returning from abroad. Exports are recorded on f.o.b basis while imports are recorded on c.i.f basis (i.e., a deviation from the practice of recording imports on f.o.b basis in the IMF Manual).
- Services: Services data are presented in a standard format providing breakdown into 5 major categories viz., travel, transportation, insurance, government not included elsewhere and miscellaneous. The disaggregation forms of miscellaneous services include software services, business services, financial services and communication services. Service receipts also include estimates of receipts reallocated from ‘unclassified’ receipts based on a survey undertaken by banks. Transportation receipts and payments of airline/shipping companies get recorded on ‘net’ basis. Travel receipts also include sales and purchases of foreign currency to/from tourists by the Full Fledged Money Changers.
- Income: Investment income component includes reinvested earnings of foreign direct investment companies and joint ventures/wholly owned subsidiaries of Indian companies operating abroad. Interest income on reserve assets is worked out on a quarterly basis. Interest income payment on NRI deposits on an accrual basis is treated as notional outflow under invisible payments and added as reinvestment in NRI deposits under Banking Capital. Interest payments on defence debt owed to the General Currency Area are recorded as investment income payments. Compensation of employees is worked out and shown separately under the head ‘income’ with effect from 1997-98, which is in line with the BPM5.
- Transfers: Private transfer receipts include remittances by Indians working overseas, local withdrawals/redemption from non-resident Indians, gifts and gold & silver brought through personal baggage. Migrants’ transfer is presently being treated as “private transfer”.
- Direct investment: In line with the international best practices, FDI data since 2000-01 include, besides equity capital, reinvested earnings of FDI companies and ‘other direct capital’ indicating inter-corporate debt transactions between related entities. Data on equity capital includes equity of both incorporated and unincorporated bodies (mainly foreign bank branches in India and Indian bank branches operating abroad). Reinvested earnings for the latest year are estimated as average of the previous two years as these data are compiled on the basis of a survey, the results of which become available with a time lag of one year.
- Portfolio investment: Portfolio investment data are compiled in line with the guidelines of BPM5.
- Loans: External assistance details are furnished by the Government of India while external commercial borrowings and trade credits are compiled on the basis of reporting in this regard by authorised dealers to the RBI. Funds raised through Foreign Currency Convertible Bonds also get covered under external commercial borrowings.
- Rupee Debt Service: This records both interest payment on and principal repayment of civilian and non-civilian debt owed to the Rupee Payment Area.
- Reserve assets: Movement in reserve assets (foreign currency assets held by the RBI, gold, SDR balances held by the Government of India and Reserve Position with the Fund) are recorded after excluding changes on account of valuation.