State of the Indian Economy

2019 ias preliminary exam test series

AN OVERVIEW

  • Central Statistics Office (CSO) has recently revised the national accounts aggregates by shifting to the new base of 2011-12 from the earlier base of 2004- 05.
 

REVISION OF BASE YEAR OF NATIONAL ACCOUNTS FROM 2004-05 TO 2011-12

The current base year revision follows the revision undertaken in January 2010. The following are the major changes incorporated in the just-concluded base-year revision:

Headline growth rate will now be measured by GDP at constant market prices, which will henceforth be referred to as ‘GDP’.

Sector-wise estimates of gross value added (GVA) will now be given at basic prices instead of factor cost. The relationship between GVA at factor cost, GVA, at basic prices, and GDP (at market prices) is given below:

GVA at basic prices = CE + OS/MI + CFC + production taxes less production subsidies GVA at factor cost = GVA at basic prices – production taxes less production subsidies GDP = Σ GVA at basic prices + product taxes – product subsidies (where, CE: compensation of employees; OS: operating surplus; MI: mixed income; and, CFC: consumption of fixed capital. Production taxes or production subsidies are paid or received with relation to production and are independent of the volume of actual production. Some examples of production taxes are land revenues, stamps and registration fees and tax on profession. Some production subsidies are subsidies to Railways, input subsidies to farmer, subsidies to village and small industries, administrative subsidies to corporations or cooperatives, etc. Product taxes or subsidies are paid or received on per unit of product. Some examples of product taxes are excise tax, sales tax, service tax and import and export duties. Product subsidies include food, petroleum and fertilizer subsidies, interest subsidies given to farmers, households, etc. through banks, and subsidies for providing insurance to households at lower rates).

Comprehensive coverage of the corporate sector both in manufacturing and services by incorporation of annual accounts of companies as filed with the Ministry of Corporate Affairs (MCA) under their e-governance initiative, MCA21. Use of MCA21 database for manufacturing companies has helped account for activities other than manufacturing undertaken by these companies.

Comprehensive coverage of the financial sector by inclusion of information from the accounts of stock brokers, stock exchanges, asset management companies, mutual funds and pension funds, and the regulatory bodies including the Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority (PFRDA) and Insurance Regulatory and Development Authority (IRDA).

Improved coverage of activities of local bodies and autonomous institutions.

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