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

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Revisiting the GDP Estimation Debate

Manufacturing Sector Output

Vikash Vaibhav’s assistance in the statistical analysis is gratefully acknowledged.

The National Accounts Statistics series with the base year 201112 raised controversy on the integrity of the gross domestic product estimates. The revised growth rates are significantly higher than the earlier figures and are out of line with macroeconomic covariates, especially for the manufacturing sector. This article reports fresh evidence on the debate by comparing growth rates of GDP manufacturing with the Annual Survey of Industries for seven years before and after the base year revision.

In 2015, Indias Central Statistical Office (CSO)now National Statistical Office (NSO)introduced a revised National Accounts Statistics (NAS) series with 201112 as the base year. It replaced the earlier one with the base year 200405. Periodic rebasing of national accounts is a routine exercise for government statistical offices everywhere. They elucidate changes in economic structure and relative prices. Rebasing allows for bringing in newer databases and improved methodologies to represent the ground reality better. The new NAS series has sought to follow the latest international templatethe United Nations System of National Accounts (SNA) 2008replacing the earlier one, SNA 1994. In the first, the new NAS has estimated private corporate sector (PCS) output (gross value added, or GVA) using the mandatory filing of annual financial returns by registered companies with the Ministry of Corporate Affairs (known as the MCA-21 database). The other significant changes are in the informal sector output estimation. These changes are advances in preparing the national accounts, broadly in line with current international guidelines and practices.

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Published On : 17th Jan, 2024

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