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Base year for GDP changed

,
Indian economy grew at 6.9%;
P Chidambaram says credit is
all UPA’s
A change in base year for computing national accounts pushed up the economic
growth rate for 2013-14 to 6.9 per cent, while earlier estimate on the basis of old
series was 4.7 per cent.
Similarly, the economic growth rate for 2012-13 has been revised upwards to 5.1 per
cent, compared with 4.5 per cent estimated earlier.
These changes follow a revision in the base for calculating national accounts to 201112 from 2004-05.
The base year was last revised in January 2010.
“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,” said a release.
The change in the base year and also the conceptual framework, the release said, “will
improve ease of understanding (data) for analysis and facilitate international
compatibility”.
The new series, it said, will also affect a wide range of indicators like trends in public
expenditure, taxes and public sector debt that are conventionally analysed in terms of
their ratios to nominal GDP.

the official press note said that the Gross Domestic Product (GDP) at factor cost will no longer be discussed.2%. “As is the practice internationally.32 lakh crore during April-December of 201415. instead Gross Value Added (GVA) will be analysed in releases. while GDP at market prices will henceforth be referred to as GDP. For the corresponding period last year.240bn. taking 201112 as the base year. The fiscal deficit has come in at Rs 5. The Coal India OFS attracted bids of 1. there are tail winds for the revenues in the form of higher dis-investment proceeds (including CIL).8% of the full-year BE of Rs 9. The 2012-13 GDP growth has been revised to 5.7% earlier. CEO. Markets fell on the last day of the week largely on the back of worse-than-expected asset quality numbers declared by banks – both public and private. However.9% of BE as against 69. For the first nine months of 2014-15.6% of the full-year target. the level of revision in the present base revision “is not large enough to affect any of these ratios significantly”. Apart from these. The revisions happen every 5 years. telecom spectrum sale and further income from the hike in excise duties for petro and diesel. Kamlesh Rao. industry-wise estimates will be presented as GVA at basic prices. about 55.2x the size of the issue and that entailed an amount of about Rs. Moreover.9% of the full-year BE. the deficit was 93.1% from 4. For April-December last year. it was higher at 58. Going ahead. the release said. The higher deficit is largely because of the lower-than-expected revenues.77 lakh-crore.5% earlier and the 2013-14 number has been revised to a substantial 6. the last quarter normally sees a large proportion of tax revenues accrue to the Government. Expenditure for the period stood at 68. tax revenue of the Centre has been Rs 5. Kotak Securities: The CSO has released the revised GDP numbers for the past two years. in case of a .45 lakh-crore.9% in the corresponding period of FY14.31 lakh-crore by 0. This will increase the size of economy.However.9% as against 4. surpassing a full-year’s BE of Rs 5.

593 and Rs 80. ‘Revised GDP proves UPA put economy back on growth path’ Former Finance Minister P Chidambaram today said the revised GDP data.0 lakh crore.9 lakh crore and the estimates for years 2012-13 and 2013-14 are Rs 31. while the estimates for 2012-13 and 2013-14 stand at 102.8 lakh crore and Rs 34.7 per cent respectively.9 per cent.6 lakh crore respectively. showing an increase of 12.6 lakh crore for 2011-12. 2012-13 and 2013-14 respectively.2 per cent in 2012-13 to 33. conclusively establishes that the UPA government put the economy back on the growth path.4 per cent in 2013-14. . with a view to meet the fiscal deficit target of 4. The rate of Gross Capital Formation at constant (2011-12) prices. The Gross National Disposable Income (GNDI) at current prices is estimated as Rs 90. respectively. however. has decreased from 37. Gross saving during 2011-12 is estimated at Rs 29. the government was successful in achieving its objectives of fiscal consolidation.” Chidambaram said in statement.4lakh crore and Rs 100. As per the new series.2 lakh crore and Rs 116. Rs 71.7 per cent and 13. while the estimates for 2012-13 and 2013-14 are Rs 88. the Government may need to resort to spending cuts. He said during his tenure as the Finance Minister since August 2012 till May 2014.8 lakh crore respectively. “The data released today and the other economic indicators conclusively establish that the UPA government succeeded in substantial measure on all the four objectives.316.5 lakh crore.388 for the years 2011-12. It further added that the per capita income at current prices has been estimated at Rs 64. the nominal Net National Income (NNI) for 2011-12 stands at Rs 78.1%. which has pegged the growth rate for 2013-14 at 6.revenue shortfall.

Earlier the FY14 growth rate was projected at 4. it will be clear that the 10 years of the UPA government recorded the highest decadal growth since Independence. moderation in inflation and putting the economy back on the growth path. “I sincerely hope that the government’s leaders will stop repeating the jibe of sub-5 per cent growth in the last two years. Analyse the case 2. “I am happy that the Government has released the revised GDP data.5 per cent estimated earlier. to the misconceived charge that the UPA government had mismanaged the economy. What are the impact on Indian Economy after these changes? . The revised estimate of FY14 economic growth was based on a new calculation method of national accounts with base year changed to 2011-12.” Chidambaram added.containing current account deficit (CAD). once and for all time. “With the GDP data for 2012-13 and 2013-14. Also. He further said that there is much work to be done and the opposition will help the government. compared with 4. It should put an end.” he added. “It is up to the government to reach out to everyone. What changes are made in GDP calculation? 3. 1. build consensus. and work toward achieving higher growth in the years to come. I wish successor governments will aim to better the UPA’s record. the economic growth rate for 2012-13 has been revised upwards to 5. from 2004-05 earlier.7 per cent.” he said.1 per cent.

4. Do you think the latest GDP figures are UPA's triumph as P Chidambaram claims? .