The Indian government's national statistics unit has revised the base year for calculating the country's macroeconomic variables and came out with revised figures for the economy for the past two years which shows the gross domestic product (GDP) grew at a scorching pace of 6.9 per cent in the year ended March 31, 2014.
As per the previous base year it was estimated that the Indian economy grew by a mere 4.7 per cent, the lowest in many years.
The previous estimates were based on 2004-05 as a base year, last revised in January 2010. The new base year is 2011-12.
Base year revisions differ from annual revisions in National Accounts. 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.
In simple terms it means, this data is not strictly comparable with previous years figures data and the 6.9 per cent growth cannot be deduced to mean that the economic growth accelerated last year.
The government said that nominal GDP growth for 2012-13 and 2013-14 is now pegged at 13.1 per cent and 13.6 per cent, respectively. Real GDP at constant prices, which is what is tracked most closely, grew 5.1 per cent during 2012-13 and rose to 6.9 per cent during 2013-14.
The growth in Gross Value Added (GVA) during 2013-14 was higher than that in 2012-13 due to higher growth in ‘trade & repair services’ (14.3 per cent), ‘communication and services related to broadcasting’ (13.4 per cent), ‘other services’ (10.7 per cent), ‘agriculture, forestry and fishing’ (3.7 per cent), ‘construction’ (2.5 per cent) and ‘public administration & defence’ (4.9 per cent).
Gross Saving during 2013-14 is estimated at Rs 34.8 lakh crore translating into savings rate of 30 per cent. This marks a sequential decline from 33 per cent in 2011-12 and 31.1 per cent in 2012-13.
The highest contributor to the gross saving was the household sector, with a share of 59.4 per cent in the year 2013-14. However, the share has declined from 67.3 per cent in 2011-12 and 63.4 per cent 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 per cent in 2011-12 to 34.5 per cent in 2013-14. The share of financial corporations has been around 9 per cent in all these years, while the dis-saving of government has decreased from 5.4 per cent in 2011-12 to 3.2 per cent in 2013-14.
Gross Capital Formation (GCF) to GDP ratio excluding valuables declined from 33.9 per cent to 31 per cent during 2012-13 and 2013-14.
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 per cent, 58.8 per cent and 59.7 per cent, respectively.
At constant (2011-12) prices, the PFCE is estimated at Rs 53.7 lakh crore and Rs 57 lakh crore for the years 2012-13 and 2013-14, respectively.
The government also estimates that Per Capita Income at current prices rose from Rs 71,593 (2012-13) to Rs 80,388 (2013-14). Correspondingly, Per Capita PFCE at current prices, rose from Rs 47,572 to Rs 54,133.