ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Higher Investment by Statistical Revision

ECONOMIC AND POLITICAL WEEKLY Higher Investment by Statistical Revision The introduction of a new series of national accounts statistics by the Central Statistical Organisation (CSO) with 1999-2000 as the base year is a welcome step, coming as it does within six years of the last revision. The revision has been facilitated by the availability of the quinquennium survey results of the National Sample Survey Organisation (NSSO) on employment and unemployment and household consumption expenditure. The revision of the national accounts statistics (NAS) has many noteworthy features and has made interesting modifications to the macroeconomic numbers. While the overall GDP estimates and the resultant annual growth rates have remained broadly the same in both the new and old series, there are differences in the sectoral growth rates. GDP estimates for agriculture and manufacturing at current prices for all the six years from 1999-2000 to 2004-05 are lower in the new series as compared with the old, while all services sectors have experienced upward revisions. A more substantial upward revision has been made to gross capital formation (GCF). The nature of the revision has raised investment rates and to an extent even domestic savings. GCF at current prices, as a proportion of GDP, had risen from 25.3 per cent in 1999-2000 to 26.3 per cent in 2003-04 in the old series, while the same have risen from 26 per cent to 27.2 per cent in the new series. For the latest year, 2004-05, the investment rate has been placed at 30.1 per cent. Considering the sketchy nature of information given, it is difficult to make a fuller judgment on the nature of revisions effected. Nevertheless, it can be said that the revisions have covered a large number of areas. A significant factor has been the improved sources of data made possible by the many NSSO surveys as also other survey and study results, which have helped to improve the output coverage of many new items in areas such as animal husbandry and others not hitherto covered in the production estimates, or some of them not adequately covered like computer-related activities in the unorganised segment, and recreation and cultural and supporting activities. Secondly, some important procedural changes which have been made are in using production data for horticultural crops and netting the retained reserves and dividends paid from the property incomes of mutual funds for estimating the output of the banking sector. However, it is the procedural changes and revisions to coverage in estimating capital formation and saving which seem to have been most significant. A statistical feat has been achieved by aligning the estimates of capital formation by industry with the primary GCF estimation by institutional categories, thus eliminating the huge discrepancies between the two that existed earlier. The result has turned out to be more revealing in that estimates of capital formation have even doubled in some sectors. In the important sectors of agriculture and registered manufacturing, the capital formation estimates have been revised upwards by about 50 per cent. In the absence of details about the methodology employed for the industry-wise distribution of the discrepancies between the two sets of estimates, it is difficult to pass any judgment on this revision, but it should nevertheless be considered a positive development that consistency in the NAS estimates has been achieved. The most conspicuous and what seems to be an inadmissible method adopted is the coverage given to a new category of

WEEKLYECONOMIC AND POLITICAL

T he introduction of a new series of national unorganised segment, and recreation and cultural and supaccounts statistics by the Central Statistical porting activities. Secondly, some important procedural Organisation (CSO) with 1999-2000 as the base changes which have been made are in using production year is a welcome step, coming as it does within six data for horticultural crops and netting the retained reserves years of the last revision. The revision has been facili-and dividends paid from the property incomes of mutual tated by the availability of the quinquennium survey funds for estimating the output of the banking sector. results of the National Sample Survey Organisation However, it is the procedural changes and revisions (NSSO) on employment and unemployment and house-to coverage in estimating capital formation and saving hold consumption expenditure. which seem to have been most significant. A statistical

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Or

To gain instant access to this article (download).


Pay
INR 59

(Readers in India)


Pay
$ 6

(Readers outside India)

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.