 "GDP data show rising discrepancies")
Discrepancies rose by Rs 41,205 crore whereas GDP expanded by a little over Rs 2 lakh crore in the second quarter year-on-year. In the first quarter, the respective figures were Rs 25,471 crore and Rs 1.93 lakh crore.
GDP rose 7.3 per cent in the second quarter, slightly higher than 7.1 per cent in the first quarter.
Discrepancies in the national accounts arise because data on the demand side is not actual data but it is derived from certain ratios. The actual data is supply-side – agriculture, industry and services. Adding indirect product taxes and subtracting give GDP data. Discrepancies emerge on the demand side and not on the supply side of the data.
Chief statistician T C A Anant said: “I don’t have all accounts data... I have to provide for errors and omissions as the two sets of numbers are different. Production is actual data. On the demand side, at this stage, we make projection based on rates and ratios and output of certain segments based on the previous year’s estimates.”
Growth pangs of GDP
The actual data come 18 months down the line from the close of a financial year.
The problem could be rectified to an extent after the Central Statistics Office comes out with a supply use table (SUT). However, there is a lag of release in this table. The office has released SUT till 2014-15 and the work on 2014-15 is under progress.
“Once the flow of SUT annually becomes more stable, it may be possible for somebody to look at it more carefully and work out a mechanism of incorporating that understanding into the current computation as well,” said Anant.
At the moment, it is the last piece of information in the national accounts puzzle, he said, adding the reason why SUT takes so long to compute is that disaggregated information on which they are based comes after a lag.
SUTs are like the input-output matrix but cover more data than the latter. These would cover both services and manufacturing, unlike the input-output matrix, which covers only factory production. The supply table describes the supply of goods and services, which are either produced in the domestic industry or imported. The use table shows where and how goods and services are used in the economy.
However, SUTs could be used for annual accounts and not for quarterly numbers, former chief statistician Pronab Sen said.
He said it is foolhardy to use SUTs for quarterly estimates even as some countries such as Australia and Canada do so.
In quarterly data, it is important not to hide discrepancies, he said.
Discrepancies have been on the rise and their growth contributed to one-fifth of the gross domestic product expansion in the second quarter of the current financial year against 13 per cent in the previous quarter.
