The government has formed a committee to upgrade the norms for computation of economic data at states and districts level in the backdrop of plans to revise the base year for National Accounts or GDP calculation.
This 13 member Committee for Sub-National Accounts will be headed by Ravindra H Dholakia.
Bakul Harshadrai Dholakia is the Former Director General of International Management Institute, New Delhi. He is best known for his time at IIM Ahmedabad, where he was the Director (2002–2007).
The idea is to capture the structural changes in the economy and make the calculation of gross domestic product (GDP) more precise. A wider direct and indirect tax base on account of measures to curb black money and reforms like goods and services tax (GST) is expected to improve the assessment of the extent of economic activity at state and lower levels.
The Ministry of Statistics and Programme Implementation (MOSPI) will change the base year to 2017-18 for the calculation of GDP and IIP numbers from the current 2011-12 with an aim to capture changes in the economy.
The panel has been asked to “review the concepts, definitions, classifications, data conventions, data sources and data requirements for preparation of State Domestic Product (SDP) and District Domestic Product (DDP) and to lay down revised guidelines”.
It will also suggest measures for improving SDP and DDP in the country taking into consideration availability of data and requirements of the Centre and states/union territories. As per the Terms of Reference of the Committee, it will also “suggest state-level annual/benchmark surveys keeping in view the needs of the System of National Accounts especially in view of the next base year revision”.
Tax base and payrolls are usually taken as indicators of the formal nature of an economy. The panel has been asked to review data sources and data requirements for preparation of state domestic product (SDP) and district domestic product (DDP) as well as to suggest state-level surveys in view of the next base year revision of national accounts.
The panel would submit its report within one year and may also submit interim reports, as necessary.
It was suggested that same principles and concepts should be used while calculating SDP and DDP across the country to make data comparable.
The Central Statistics Office (CSO), MOSOPI, revises the base year of the macroeconomic indicators, as a regular exercise, to capture structural changes in the economy and improve the quality and representativeness of the indices.
The CSO had last updated base year for GDP calculation to 2011-12 from January 2015, replacing the old series base year of 2004-05.
At present, six states—Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka and Rajasthan—account for half of the country’s gross domestic product, going by the values at current prices for the year 2015-16.
Agriculture, manufacturing and real estate, ownership of dwellings and professional services contribute the most to the overall gross state domestic product in these states.