Government’s decision to update the base year for measuring national accounts resulted in economic growth rate getting revised upwards to 6.9 percent for 2013-14. The economic growth rate for 2012-13 has been revised upwards to 5.1 percent from earlier estimate of 4.5 percent. The previous estimates had put economic growth rate at sub-5 percent level for the past two years.
The Gross Domestic Product (GDP) growth rate for 2013-14 too, following adoption of the new series with base year 2011-12 has gone up by almost 50 percent. The rate of expansion was estimated at 4.7 percent under the old series that had 2004-05 as base year. However, the size of economy marginally declined to Rs 113.45 lakh crore in 2013-14 under the new series from Rs 113.55 lakh crore under the old series. Similarly, the size of the economy in 2012-13 declined under the new series to Rs 99.88 lakh crore from Rs 101.13 lakh crore at current market prices. Also, during 2013-14, contribution of agriculture sector has declined marginally to 18.2 percent in new series from 18 percent with 2004-05 as base year.
The CSO has decided to adopt the international practice of presenting industry-wise estimates as ‘Gross value added at basic prices’ (GVA) hence the new series 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. Under the new series, estimates of value added are compiled separately for crops and livestock sector.
