India’s National Income Estimates for This Year

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The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation have released the First Advance estimates of national income at constant (2011-12) and current prices, for the financial year 2016-17.

The First Advance Estimates of GDP have been released in accordance with the release calendar of National Accounts.

The approach for compiling the advance estimates is based on benchmark-indicator method.

The Sector-wise estimates are obtained by extrapolation of indicators like (i) Index of Industrial Production of first 7 months of the financial year, (ii) financial performance of listed companies in the private corporate sector available upto quarter ending September, 2016 (ii) 1st advance estimates of crop production, (iii) accounts of Central & State Governments, information on indicators like sales tax, deposits & credits, passenger and freight earnings of railways, passengers and cargo handled by civil aviation, cargo handled at major sea ports, sales of commercial vehicles etc. available for first 7/8 months of the financial year.

The salient features of the estimates are detailed below:

A. ESTIMATES AT CONSTANT (2011-12) PRICES

Gross Domestic Product

Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2016-17 is likely to attain a level of `121.55 lakh crore, as against the Provisional Estimate of GDP for the year 2015-16 of `113.50 lakh crore, released on 31st May 2016. The growth in GDP during 2016-17 is estimated at 7.1 per cent as compared to the growth rate of 7.6 per cent in 2015-16.

Gross Value Added (GVA) at Basic Prices

Real GVA, i.e, GVA at basic constant prices (2011-12) is anticipated to increase from `104.27 lakh crore in 2015-16 to `111.53 lakh crore in 2016-17. Anticipated growth of real GVA at basic prices in 2016-17 is 7.0 percent against 7.2 percent in 2015-16.

The sectors which registered growth rate of over 7.0 percent are, ‘public administration, defence and other services’, ‘financial, real estate and professional services’ and ‘manufacturing’.

The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘electricity, gas, water supply and other utility services’, ‘construction’ and ‘Trade, hotels, transport, communication and services related to broadcasting’ is estimated to be 4.1 per cent, (-)1.8 per cent, 6.5 percent, 2.9 per cent and 6.0 percent respectively.

Agriculture

The ‘agriculture, forestry and fishing’ sector is likely to show a growth of 4.1 per cent in its GVA during 2016-17, as against the previous year’s growth rate of 1.2 per cent. The GVA estimates of this sector have been compiled using the First Advance Estimates of production of major Kharif crops for 2016-17 and targets based on rabi sowings.

According to the information furnished by the Department of Agriculture and Cooperation (DAC), the production growth of food grains during the Kharif season of agriculture year 2016-17 was 8.9 percent as compared to decline of 3.2 percent during the same period in 2015-16.

In case of livestock sector, estimates of production, mainly in the form of targets are available for milk, egg, and wool, from the Department of Animal Husbandry, Ministry of Agriculture. Around 39.0 percent of GVA of this sector is based on livestock products, forestry and fisheries, which registered a combined growth of above 3.7 percent in 2016-17.

Mining and quarrying

GVA at basic prices for 2016-17 from ‘mining and quarrying’ sector is estimated to decline by 1.8 percent as compared to growth of 7.4 percent in 2015-16. The key indicators of mining sector, namely, production of coal, crude oil and natural gas registered growth rates of 1.6 per cent, (-)3.5 percent and (-)3.7 percent respectively during April-November 2016-17 as compared to 4.3 percent, (-)0.4 percent and (-)2.3 percent respectively during April-November, 2015-16.

The growth rates observed in these items have been used to extrapolate the Provisional Estimates of value of output of coal, crude petroleum, and other major and minor minerals, respectively.

IIP of mining registered growth rate of (-)0.2 percent during April-October, 2016-17 as compared to 2.2 percent during April-October, 2015-16. Advance Estimate of IIP for 2016-17 of this sector, compiled by dividing the cumulative index for the first 7 months of the current financial year, by the average of ratio of 7 months index to the annual index of past years has been used.

The private corporate sector growth in the mining sector was estimated using latest available information on major listed companies during first half of 2016-17.

Manufacturing

GVA at basic prices for 2016-17 from ‘manufacturing’ sector is estimated to grow by 7.4
percent as compared to growth of 9.3 percent in 2015-16. The private corporate sector has a share of around 72 percent in the manufacturing sector.

The private corporate sector growth in the manufacturing sector was estimated using latest available information on major listed companies during first half of 2016-17. The quasi corporate and unorganized segment (which include individual proprietorship and partnerships and khadi & village Industries has a share of around 23 percent in the manufacturing sector) has been estimated using IIP of manufacturing.

The Advance Estimates of IIP at 2-digit industry groups for the current year are initially compiled by dividing the cumulative index for the 7 months of the current year, by the average of ratio of 7 months index to the annual index of past years. The estimated IIP so derived for the current year at 2-digit level is used to extrapolate the previous year’s value added estimates at 2-digit level, separately for the quasi corporate and household sectors.

IIP manufacturing registered growth rates of (-) 1.0 during April-October, 2016-17 as compared to 5.1 percent during April-October, 2015-16. The wholesale price index (WPI), in respect of the manufactured products registered a growth of 2.0 per cent during April-November, 2016-17 as compared to (-)1.3 percent during April-November, 2015-16.

Electricity, Gas, water supply and other utility services

GVA at basic prices for 2016-17 from ‘Electricity ,Gas, water supply and other utility services’ sector is expected to grow by 6.5 percent as compared to growth of 6.6 percent in 2015-16. The Advance Estimates of key indicator of this sector, namely, IIP of Electricity compiled by dividing the cumulative index for the 7 months of the current year, by the average of ratio of 7 months index to the annual index of past years has been used.

IIP of Electricity registered a growth rate of 4.6 percent during April-October, 2016-17 as against 5.2 percent growth during April-October, 2015-16.

Construction

GVA at basic prices for 2016-17 from ‘Construction’ sector is expected to grow by 2.9 percent as compared to growth of 3.9 percent in 2015-16. Key indicators of construction sector, namely, production of cement and consumption of finished steel registered growth rates of 4.3 percent and 3.0 percent respectively during April-November, 2016-17.

Trade, hotels and Transport & communication and services related to broadcasting

The estimated growth in GVA for the trade, hotels, transport and communication and services related to broadcasting services during 2016-17 is placed at 6.0 per cent as against growth of 9.0 percent in the previous year.

Key indicator used for estimating GVA from Trade sector is the sales tax growth. As per the available monthly data on state accounts available from CAG website, sales tax collection is expected to grow by 8.6 percent during 2016-17. WPI of all commodities registered 2.8 percent growth during April-November 2016-17 as against (-)3.3 percent during April-November, 2015-16. Among the other services sectors, the key indicators of railways, namely, the net tonne kilometres and passenger kilometres have shown growth rate of (-) 7.4 per cent and (-) 0.4 percent respectively during April-November 2016-17.

Cargo handled at major sea ports increased by 6.8 per cent during April-November, 2016-17 as compared to 3.4 percent during April-November, 2015-16. Passengers and cargo handled by civil aviation increased by 19.6 per cent and 9.9 per cent respectively during April-November, 2016-17 as compared to 16.5 percent and 5.9 percent respectively during April-November, 2015-16. Sales of commercial vehicles registered growth of 4.7 percent during April-November, 2016-17 as compared to 8.1 percent during April-November, 2015-16.

Financial, insurance, real estate and professional services

The estimated growth in GVA for this sector during 2016-17 is placed at 9.0 percent as compared to growth of 10.3 percent in 2015-16. Major component of this industry is the real estate and professional services which has a share of 71.0 percent. The key indicators of this sector are the quarterly growth of corporate sector for real estate sector and computer related activities which was estimated using latest available information on listed companies for the first half of 2016-17.

The other indicators of this sector, viz., aggregate bank deposits and bank credits have shown growth rates of 9.8 per cent, and 9.1 per cent, respectively as on October 2016 as against growth of 10.5 percent and 8.8 percent respectively as on October 2015.

Public administration and defence and other services

GVA at basic prices for 2016-17 from this sector is expected to grow by 12.8 percent as compared to growth of 6.6 percent in 2015-16. The key indicator of this sector namely, Union Government expenditure net of interest payments and subsidies grew by 25.3 percent during April-November 2016-17.

Per Capita Income

The per capita income in real terms (at 2011-12 prices) during 2016-17 is likely to attain a level of `81805 as compared to `77,435 for the year 2015-16. The growth rate in per capita income is estimated at 5.6 per cent during 2016-17, as against 6.2 per cent in the previous year.

B. ESTIMATES AT CURRENT PRICES

Price indices used as deflators

The wholesale price index (WPI), in respect of the groups – food articles, manufactured products, electricity and all commodities, has risen by 6.9 per cent, 2.0 per cent, (-)1.4 per cent and 2.8 percent, respectively during April-November 2016-17. The consumer price index has shown a rise of 5.0 per cent during April-November, 2016-17.

Gross Domestic Product

GDP is derived by adding taxes on products net of subsidies on products to GVA at basic prices. GDP at current prices in the year 2016-17 is likely to attain a level of `151.93 lakh crore, as against `135.76 lakh crore in 2015-16 showing a growth rate of 11.9 per cent.

National Income

The nominal Net National Income (NNI), also known as national income (at current prices) is likely to be `133.81 lakh crore during 2016-17, as against `119.69 lakh crore for the year 2015-16. In terms of growth rates, the national income registered a growth rate of 11.8 per cent in 2016-17 as against the previous year’s growth rate of 8.7 per cent.

Per Capita Income

The per capita net national income during 2016-17 is estimated to be `103,007 showing a rise of 10.4 per cent as compared to `93,293 during 2015-16 with the growth rate of 7.4 percent.

C. ANNUAL ESTIMATES OF FINAL EXPENDITURES OF GDP, 2016-17

Along with the First Advance Estimates of GVA at basic prices by economic activity, the First Advance Estimates of expenditures of the GDP at current and constant (2011-12) prices are also released. These estimates have been compiled using the data from the same sources as those used for compiling GVA estimates by economic activity, detailed data available on merchandise trade in respect of imports and exports, balance of payments, and expenditure of Central Government.

As various components of expenditure on gross domestic product, namely, consumption expenditure and capital formation, are normally measured at market prices, the discussion in the following paragraphs is in terms of market prices only.

Private Final Consumption Expenditure

Private Final Consumption Expenditure (PFCE) at current prices is estimated at `89.72 lakh crore in 2016-17 as against `80.78 lakh crore in 2015-16. At constant (2011-12) prices, the PFCE is estimated at `67.13 lakh crore in 2016-17 as against `63.01 lakh crore in 2015-16. In terms of GDP, the rates of PFCE at current and constant (2011-12) prices during 2016-17 are estimated at 59.1 per cent and 55.2 per cent, respectively, as against the corresponding rates of 59.5 per cent and 55.5 per cent, respectively in 2015-16.

Government Final Consumption Expenditure

Government Final Consumption Expenditure (GFCE) at current prices is estimated at `18.61 lakh crore in 2016-17 as against `14.39 lakh crore in 2015-16. At constant (2011-12) prices, the GFCE is estimated at `13.95 lakh crore in 2016-17as against `11.27 lakh crore in 2015-16.

In terms of GDP, the rates of GFCE at current and constant (2011-12) prices during 2016-17 are estimated at 12.3 per cent and 11.5 per cent, respectively, as against the corresponding rates of 10.6 per cent and 9.9 per cent, respectively in 2015-16.

Gross Fixed Capital Formation

Gross Fixed Capital Formation (GFCF) at current prices is estimated at `40.39 lakh crore in 2016-17 as against `39.72 lakh crore in 2015-16. At constant (2011-12) prices, the GFCF is estimated at `35.35 lakh crore in 2016-17 as against `35.41 lakh crore in 2015-16. In terms of GDP, the rates of GFCF at current and constant (2011-12) prices during 2016-17 are estimated at 26.6 per cent and 29.1 per cent, respectively, as against the corresponding rates of 29.3 per cent and 31.2 per cent, respectively in 2015-16. The GFCF is expected to register growth rate of 1.7 percent at current prices and (-)0.2 percent at constant prices.

Estimates of Gross/Net National Income and Per Capita Income along with GVA at basic prices by kind of economic activity and the Expenditures of GDP for the years 2014-15 and 2015-16 and 2016-17, at constant (2011-12) and current prices are given in Statements 1 to 4.

The next release of second advance estimates of national income for the year 2016-17 and quarterly GDP estimate for the quarter October-December, 2016 (Q3 of 2016-17) will be on 28.02.2017.

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