Some Methodological Issues

Manufacturing Output in New GDP Series

The new gross domestic product series, with base year 2011–12, has mostly replaced the Annual Survey of Industries with corporate financial data for estimating manufacturing value added. This has resulted in its higher share in GDP and a faster growth rate (compared to the older series). The Central Statistics Office claims that the new series better captures value addition, as ASI reportedly left out activities outside the factory of an enterprise. This claim is probably not true, as is evident from closer examination of a sample of ASI primary schedules.

In 2015, the Central Statistics Office (CSO) introduced the new series of National Accounts Statistics (NAS) with 2011–12 as the base year, replacing the earlier series with the base year 2004–05. The new series has followed the guidelines of the United Nations’ System of National Accounts (UNSNA) 2008, replacing the earlier template of UNSNA 1994. The revision has, as always, introduced some newer methodologies and updated many databases. However, dramatic and unexpected changes in the levels and growth rates of the gross domestic product (GDP) (and its principal sectors) have caught public and policymakers’ attention, raising doubts over the veracity of the new GDP estimates.

Specifically, the manufacturing sector estimates in the new series are in the eye of the storm, since its share in GDP at current prices is larger by about two percentage points (compared to the old series), and its annual growth rates are significantly higher—with a change even in the direction of growth in some cases. For instance, for 2013–14, the growth rate of manufacturing gross value added (GVA) at constant prices swung from (-)0.7% in the old series, to (+)5.3% in the new series (Figures 1a and 1b). Such wide variations in the growth rates for the same years reported by the two series of the same publication, expectedly, drew widespread criticisms, especially since the new estimates were quite at variance with other macro correlates (Nagaraj 2015a).

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users

Updated On : 31st Aug, 2018

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

The National Education Policy, 2020 unveiled finally seeks to usher in major structural reforms in higher education. Among many measures,...

The COVID-19 pandemic and the resultant lockdown led to the closure of all markets in Manipur, including the Tribal Market Complex in Imphal East...

Coherent national strategies, backed by regional cooperation efforts, offer a way forward for economic recovery in South Asia, which is rapidly...

Sections 357 and 357-A of the Code of Criminal Procedure, 1973 lay down the procedure for granting compensation to the victims of crime. Under the...

The COVID-19 pandemic has provocatively challenged the extant paradigm of development whose theoretical underpinning is derived from the...

The first report of the Fifteenth Finance Commission has allayed many fears that arose after the notification of the terms of reference of the...

Without employment providing a structure in people’s lives and with technology replacing many human activities, our societies will likely shift...

While the shock and awe campaign of the Bharatiya Janata Party and right-wing affiliates in Tamil Nadu social media circles has been spilling over...

The pandemic has exposed inequity as an immediate concern. This article draws its insights on ground issues faced by schoolteachers from across...

India’s economic order is far from neo-liberal. The state, and thus politicians, have retained very substantial powers over market forces....

Back to Top