New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation



New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation (Base Year 2011-12) 


The Ministry of Statistics & Programme Implementation has released the new series of national accounts, revising the base year from 2004-05 to 2011-12. The base year of national accounts was last revised in January 2010.

2.         Base year revisions differ from annual revisions in National Accounts primarily because of nature of changes. In annual revisions, changes are made only on the basis of updated data becoming available without making any changes in the conceptual framework or using any new data source, to ensure strict comparison over years. In case of base year revisions, apart from a shift in the reference year for measuring the real growth, conceptual changes, as recommended by the international guidelines, are incorporated.  Further, statistical changes like revisions in the methodology of compilation, adoption of latest classification systems, and, inclusion of new and recent data sources are also made.  Changes are also made in the presentation of estimates to improve ease of understanding for analysis and facilitate international comparability.

3.         Improvements as noted above, especially incorporation of new datasets, have resulted in a correction in the level of GDP, which is likely to affect a wide range of indicators where it is used as a reference point: for instance, trends in public expenditure, taxes and public sector debt that are conventionally analysed in terms of their ratios to nominal GDP. It may be noted that the level of revision in the present base revision is not large enough to affect any of these ratios significantly.

4.         Users are requested to note that Gross Domestic Product (GDP) at factor cost will no longer be discussed in the press releases. As is the practice internationally, industry-wise estimates will be presented as Gross Value Added (GVA) at basic prices, while ‘GDP at market prices’ will henceforth be referred to as GDP. Estimates of GVA at factor cost (earlier called GDP at factor cost) can be compiled by using the estimates of GVA at basic prices and production taxes less subsidies as given in Statement 3.1 of this note. For the years 2011-12, 2012-13 and 2013-14, GVA at factor cost have been compiled and are presented in Statements 10.1 & 10.2.

5.         A brief note on the conceptual and statistical changes made in the new series, and its effect on the key estimates are given in Annex. A short publication giving more details of the revision shall be made available in public domain by the last week of February 2015.



6.         The salient features of the key macro-economic aggregates are indicated in the following paragraphs.

Gross Domestic Product
7.         GDP for the base year 2011-12 is estimated as Rs. 88.3 lakh crore. Nominal GDP or GDP at current prices for the year 2012-13 is estimated as Rs. 99.9 lakh crore while that for the year 2013-14 is estimated as Rs. 113.5 lakh crore, exhibiting a growth of 13.1 percent and 13.6 percent during the years 2012-13 and 2013-14 respectively.

8.         Real GDP or GDP at constant (2011-12) prices stands at Rs.92.8 lakh crore and Rs.99.2 lakh crore, respectively for the years 2012-13 and 2013-14, showing growth of 5.1 percent during 2012-13, and 6.9 percent during 2013-14.

Industry-wise Analysis
9.         The percentage changes in the Gross Value Added (GVA) at basic prices in different sectors of the economy are presented in Statements 4.1 and 4.2. At the aggregate level, nominal GVA at basic prices increased by 13.2 percent during 2013-14, as against 12.9 percent during 2012-13 (Statement 1.1). In terms of real GVA, i.e., GVA at constant (2011-12) basic prices, there has been a growth of 6.6 percent in 2013-14, as against growth of 4.9 percent in 2012-13.

10.       The growth in GVA during 2013-14 has been higher than that in 2012-13 due to higher growth in ‘trade & repair services’ (14.3%), ‘communication and services related to broadcasting’ (13.4%), ‘other services’ (10.7%), ‘agriculture, forestry and fishing’ (3.7%), ‘construction’ (2.5%) and ‘public administration & defence’ (4.9%).

Net National Income
11.       Nominal Net National Income (NNI) for the year 2011-12 stands at Rs. 78.5 lakh crore, while the estimates for the years 2012-13 and 2013-14 are Rs. 88.4 lakh crore and Rs. 100.6 lakh crore, showing an increase of 12.7 percent and 13.7 percent during 2012-13 and 2013-14 rsepectively.

Gross National Disposable Income
12.       Gross National Disposable Income (GNDI) at current prices is estimated as Rs.90.6 lakh crore for the year 2011-12, while the estimates for the years 2012-13 and 2013-14 stand at 102.2 lakh crore and Rs.116.0 lakh crore, respectively.


Saving
13.       Gross Saving during 2011-12 is estimated as Rs.29.9 lakh crore, and the estimates for the years 2012-13 and 2013-14 are Rs. 31.8 lakh crore and Rs. 34.8 lakh crore respectively. Rate of Saving to GNDI for the years 2011-12, 2012-13 and 2013-14 is estimated as 33.0 percent, 31.1 percent and 30.0 percent respectively.


14.       The highest contributor to the Gross Saving is the household sector, with a share of 59.4 percent in the year 2013-14. However, the share has declined from 67.3 percent in 2011-12 and 63.4 percent in 2012-13. This decline can be attributed to the decline in household savings in physical assets, which has declined from Rs.13.4 lakh crore in 2011-12 to Rs. 12.1 lakh crore in 2013-14. On the other hand, the share of Non-Financial Corporations has increased from 29.3 percent in 2011-12 to 34.5 percent in 2013-14. The share of Financial Corporations has been around 9 percent in all these years, while the dis-saving of General Government has decreased from 5.4 percent in 2011-12 to 3.2 percent in 2013-14.

Capital Formation
15.       Gross Capital Formation (GCF) at current and constant prices is estimated by two approaches – (i) through flow of funds, derived as Gross Saving plus net capital inflow from abroad; and (ii) by the commodity flow approach, derived by the type of assets. The estimates of GCF through the flow of funds approach are treated as the firmer estimates, and the difference between the two approaches is taken as “errors and omissions”. However, GCF by industry of use and by institutional sectors does not include “valuables”, and therefore, these estimates are lower than the estimates available from commodity flow.

16.       Gross Capital Formation (GCF) at current prices is estimated as Rs. 33.7 lakh crore for the year 2011-12, while the estimates for both the years 2012-13 and 2013-14 stand at Rs. 36.6 lakh crore. Since GCF did not increase during 2013-14, the rate to GDP declined during the year to 32.3 percent as against 36.6 during 2012-13. The rate of GCF to GDP excluding valuables stands at 33.9 percent and 31 percent during 2012-13 and 2013-14 respectively. The rate of capital formation in the years 2011-12 to 2013-14 has been higher than the rate of saving because of net capital inflow from Rest of the World (ROW).

17.       In terms of the share to the total GCF (at current prices), the highest contributor is Non-Financial Corporations, with the share rising steadily from 46.6 percent in 2011-12 to 51.5 percent in 2013-14. Share of household sector in GCF is also significant, which has declined from 42 percent in 2011-12 to 34.2 percent in 2013-14. The share of General Government in GCF has increased from 10 percent in 2011-12 to 13.2 percent in 2013-14.

18.       The rate of Gross Capital Formation at constant (2011-12) prices has decreased from 37.2 in 2012-13 to 33.4 in 2013-14.

19.       Within the Gross Capital Formation at current prices, the Gross Fixed Capital Formation (GFCF) amounted to Rs. 33.7 lakh crore in 2013-14 as against Rs. 31.4 lakh crore and Rs. 29.7 lakh crore in 2012-13 and 2011-12 respectively.  The change in stocks of inventories, at current prices, decreased from Rs. 2.2 lakh crore in 2011-12 to Rs. 1.8 lakh crore in 2013-14, while the valuables decreased from Rs. 2.5 lakh crore in 2011-12  to Rs. 1.5 lakh crore in 2013-14.

Consumption Expenditure
20.       Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs. 50.9 lakh crore for the base year 2011-12, increasing to Rs. 58.8 lakh crore in 2012-13 and further to Rs. 67.7 lakh crore in 2013-14. In terms of GDP, the rates of PFCE at current prices during 2011-12, 2012-13 and 2013-14 are estimated at 57.6 percent, 58.8 percent and 59.7 percent respectively.

21.       At constant (2011-12) prices, the PFCE is estimated at Rs. 53.7 lakh crore and Rs. 57.0 lakh crore for the years 2012-13 and 2013-14 respectively. The corresponding rates of PFCE for the years 2012-13 and 2013-14 are 57.9 percent and 57.5 percent respectively.

22.       Government Final Consumption Expenditure (GFCE) is estimated at Rs. 9.9 lakh crore for the year 2011-12. The estimates of GFCE at current prices for the years 2012-13 and 2013-14 stand at Rs. 10.9 lakh crore and Rs. 12.8 lakh crore, respectively. At constant (2011-12) prices, the estimates of GFCE for the years 2012-13 and 2013-14 stand at Rs. 10.0 lakh crore and Rs. 10.9 lakh crore respectively.


Estimates at per capita level
23.       For the purpose of estimation of Per Capita Income and Per Capita PFCE, Population Projections compiled on the basis of Census 2011 have been used. Per Capita Income at current prices, estimated as Per Capita Net National Income at current prices, is estimated at Rs. 64316, Rs. 71593 and Rs. 80388 for the years 2011-12, 2012-13 and 2013-14 respectively.  Correspondingly, Per Capita PFCE at current prices, for the years 2011-12, 2012-13 and 2013-14 is estimated as Rs. 41728, Rs. 47572 and Rs. 54133, respectively.

24.       Details of these estimates are available in Statements 1-10 appended with this Press Note.

25.       The upcoming releases on GDP are indicated below:
        i.            Advance Estimates for the year 2014-15 alongwith quarterly estimates for Q1, Q2 and Q3 of 2014-15 on February 9, 2015; and
      ii.            Provisional Estimates for the year 2014-15 alongwith estimates for all the four quarters of the year on May 29, 2015.

Click here to see Annexure. 

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Shri M.Venkaiah Naidu plainly asks states ‘are you ready for smart cities?’ Says it is a daunting a task but doable; seeks to motivate states 

Shri Naidu says smart cities are all about ‘4 S’ and ‘4 P’ Lauds Postal Department for issuing ‘Swachh Bharat’ stamp 

Ministry of Urban Development Shri M.Venkaiah Naidu has plainly asked the states if they were ready to make their cities and towns smart under the centre’s initiative of building 100 smart cities. He posed this straight question during his inaugural address here today at the ‘Consultation Workshop with States and Stakeholders’ being organized his ministry, to take states on board before launching smart cities initiative.

Laying bare the challenges and issues, Shri Naidu has sought to motivate the states and urban local bodies to rise to the occasion by reorienting their mindsets and approaches towards urban management and make a success of smart cities initiative in the larger interest of the country and its people. He asserted that ‘Building smart cities is challenging but doable. He said building smart cities is all about 4 S and 4 P. Smart Leadership, Smart Governance, Smart Technologies and Smart People make a city smart. The resource challenge can be met if we make a success of Public-Private-People Partnership.’ 

Elaborating on the concept of 4 S, Shri Naidu said, Smart Leadership should be guided by a vision and mission, have courage to take quick and bold decisions, adopt best practices and attract investments. Smart governance is needed to ensure transparency and accountability through adoption of technology platforms to reduce human to human interface and ensure online delivery of services and real time information besides promoting participation of citizens in decision making and execution. Smart technologies will enable efficient energy, traffic, solid waste and waste to wealth management, real time information and service delivery etc. People should be smart enough to partner in the city development by willing to pay for the value addition to the services, able to question the authorities and enforce accountability. The Minister said that smart cities shall be liveable, workable, inclusive and sustainable. 

Shri Venkaiah Naidu also made it clear that states and urban local bodies have to play the key role in building smart cities while the central government could do the handholding as an enabler besides providing some financial assistance. The states and urban local bodies have come out with required policy and procedural innovations for attracting investments. 

The Minister informed the states that with a view to select the most willing and able cities and towns for making them smart, a ‘City Challenge’ competition would be held to assess the proven ability of cities in terms of reforms and innovation and the potential. 

Shri M.Venkaiah Naidu complimented the Department of Posts for issuing a Commemorative Stamp on ‘Swachh Bharat’ on the occasion of the 67th Death Anniversary of Mahatma Gandhi which is being observed as Martyrs Day. He said that while the Mahatma effectively used ‘Satyagraha’ during the freedom struggle, the country and its people need to resort to ‘Swachhagraha’ to make the country clean by October 2, 2019 as a befitting tribute to him on the occasion of Mahatma’s 150th Birth Anniversary. 

Shri Naidu observed that total sanitation is the need of the hour given its adverse impacts on people’s health and economy. He noted that inadequate sanitation is costing about US $ 54 billion i.e 6.40% of GDP each year besides resulting in 18 lakh deaths each year due to diarrheal diseases. About 80% of the diseases are water-borne and water related following water pollution, contamination and logging. He informed that about 19% of urban households do not have toilets within their premises and about 13% are defecating in the open. 

Stating that massive awareness campaign is required to change the mindsets of people to adopt clean sanitation practices, Shri Naidu noted that the ‘Swachh Bharat’ stamp released today would help in this regard. He said, awareness generation and infrastructure development should be followed by stricter penalties to ensure total sanitation. 

Shri Shankar Aggarwal, Secretary(UD) elaborated on the broad contours of four new initiatives in urban sector viz., Swachh Bharat Mission, Smart Cities, Infrastructure Development in 500 cities and Heritage Development and Augmentation Yojana(HRIDAY). 

Senior officials of the Ministry of Urban Development, Principal Secretaries and Secretaries of all states, Municipal Commissioners and experts are attending the two day Consultations that will conclude tomorrow. 


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Dr VK Saraswat Assumes Charge as Member of NITI Aayog 

Dr VK Saraswat took over as member NITI Aayog here today. Dr Saraswat is former Secretary of Defence (Research & Development- R&D) and Director General of Defence Research & Development Organisation (DRDO). 

A PhD in Combustion Engineering, Dr Saraswat played a very significant role in the development of the country’s first Liquid Propulsion Engine, DEVIL. As Project Director of Prithvi, he steered the design, development, production and induction of the first indigenous Surface-to-Surface missile system into the armed forces. 

He was conferred the Padma Shri in 1998 and the Padma Bhusan in 2013. 


New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation Reviewed by Ajit Kumar on 9:33 AM Rating: 5

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