Harmonising Definitions on Banking

RBI has harmonised definitions of banking and banking related activities.

Today, the Reserve Bank updated the glossary on ‘Banking Statistics – Harmonised Definitions of Data Elements’ for regulatory reporting (weblink: https://rbi.org.in/scripts/DataDefinition.aspx) by including definitions of 101 additional data items. This glossary will be kept updated as and when new data items are prescribed for regulatory reporting or clarification/modification is required for any existing data item/s.

Background

2. In its report of June 2022, the Reserve Bank’s Regulations Review Authority 2.0 (RRA 2.0) made a comprehensive review of regulatory reporting prescriptions and made several recommendations on ease of compliance, reduction in regulatory burden, streamlining of reporting mechanism and dissemination and ease of accessibility of regulatory instructions. These inter alia included placing a single updated master file containing definitions of data items on the newly created “Regulatory Reporting” link on the RBI website, where consolidated information relating to regulatory reporting and submission of returns by regulated entities (REs) are made available at a single place.

3. Earlier, the Reserve Bank had issued a Technical Guidance Note vide the press release dated March 30, 2017 to complement the instructions issued by means of various circulars, for ensuring uniformity in reporting and thereby improving data quality. The glossary was updated with harmonised definitions of 83 additional data items vide the circular DBR.No.BP.BC.99/08.13.100/2017-18 dated January 4, 2018.

Unstated but really important reforms.

A Teacher Writes to Students Series (X): Whatever Happened to Democracy?

This is part (X) of A Teacher Writes to Students Series.

Whatever Happened to  Democracy?
By Annavajhula J C Bose, PhD
Department of Economics, SRCC

A Teacher Writes to Students Series (IX): Neoliberalism and New Economics

This is part IX of A Teacher Writes to Students Series

Neoliberalism and New Economics
By Annavajhula J C Bose, PhD
Department of Economics, SRCC

A Teacher Writes to Students Series (VIII): Grassroots Development

This is Part VII of the A Teacher Writes to Students Series

Grassroots Development
By Annavajhula J C Bose, PhD
Department of Economics, SRCC

Cancellation of Public Holiday in Denmark to increase labor supply, GDP, and fiscal revenues!

Denmark government has decided to cancel a public holiday from 2024 onwards to improve macroeconomic outcomes. This IMF paper reviews the probable impact of the policy:

The Danish government decided to cancel Store Bededag (Great Prayer Day) as a public holiday. The decision was approved by parliament in February 2023 and will become effective in 2024. Store Bededag is celebrated on the third Friday after Easter, i.e. always on a weekday; therefore, it’s cancellation implies an increase in annual statutory working hours by 0.45 percent3. The tripartite agreement among the government, the employers, and the unions stipulates that employees with monthly salary contracts will get a 0.45 percent increase in their annual salary, while those with hourly contracts (accounting for about 20 percent of employment) will be compensated according to hours worked on the new working day.

Cancellation of a public holiday is a rare policy experiment. Historically, the trend has been one of more leisure and less work: shorter hours, more annual paid leave, and more holidays. Some exceptions to this trend include declaring Pentecost Monday a “solidarity day” in France in 2004 and canceling four public holidays in Portugal in 2012 (that were reinstated in 2016). In both cases, the policy changes were undertaken as part of a comprehensive package of measures, making it difficult to isolate the effects of the holiday cancellations. As countries try to find new ways to boost labor supply, GDP, and fiscal revenues in the face of declining working-age populations, Denmark’s initiative offers an interesting case study

Probable impact:

The cancellation of the public holiday is expected to have a small positive impact on labor supply. It is a rare policy initiative, making it difficult to estimate its expected economic implications. Nevertheless, based on recent cross-country empirical analysis on the causal effects of public holidays on economic growth as well as the historical correlation between statutory and actual work hours in Denmark, labor supply can be expected to increase by about 0.14–0.34 percent. In terms of magnitude, this effect is comparable to reducing the ratio of people using early retirement schemes by 2 percentage points or increasing the employment rates of different categories of immigrants and descendants by 1.15 percentage points each. A similar labor supply impact should also be possible to achieve through a revenue–neutral tax and benefit system reform.

Efforts to explore alternative measures to increase labor supply should continue. Thanks to its successful flexicurity model, Denmark has been able to achieve a well-functioning labor market characterized by high labor market participation and low structural unemployment. This implies that further efforts to sustainably increase employment may involve some policy tradeoffs that need to be carefully considered. In particular, reforming the tax and benefit system, tightening conditions for early retirement, and efforts to close the employment gaps of immigrants could be considered in terms of equity considerations, fiscal costs, impact on productivity, and ease of implementation, including political economy considerations.