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Discrepancies between Flow of Funds Accounts and National Accounts Statistics

K G K Subba Rao (kgksubbarao@gmail.com) is Former Adviser, Reserve Bank of India, Mumbai.

The Reserve Bank of India revamped the flow of funds compilations to be in conformity with the sectoral classification recommended in the System of National
Accounts 2008, which has also been adopted in the revised series of National Accounts Statistics, brought out by the Central Statistics Office. Though the revisions made in the compilations of the two organisations are expected to bring about refinements, wide discrepancies have been noticed between the financial
resources gap emanating from the flow of funds accounts and the investment–saving gap derivable from the National Accounts Statistics. The revisions inducted
into the respective accounts emphasise the need to reduce the discrepancies between the two sets of accounts to an acceptable level.

This is a revised version of the paper presented at the Indian Association for Research in National Income and Wealth (IARNIW) Conference, March 2017, Jaipur. The author is thankful to the anonymous referee for helpful comments.

Updated On : 16th Apr, 2018

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