- The IIP is based on a limited sample of producing units, while the new series of national accounts employs varied data sources including Annual Survey of Industries, MCA21 and IIP.
- Financing, insurance, real estate, and business services, one of the most dynamic sector in the economy in recent years, is reckoned to have driven growth in the current year.
- The base revision has also shown that the contribution of the agriculture sector to overall GVA at factor cost is somewhat higher than was hitherto being shown on the basis of the earlier (2004-05) series.
- The difference between gross value of output (GVO) and gross value added (GVA) is intermediate consumption.
- The ratio of GVA to GVO shows that value addition is the highest in agriculture and lowest in manufacturing. India operates at the lowest incremental capital output ratios (ICOR-based on GFCF) among the BRICS countries (and Indonesia).
- From the past trends in the saving rate (gross domestic savings as percentage of GDP) available from the pre-revised series, it is observed that it reached its historical peak in 2007-08 (36.8%).
- As per the new series, the ratio of the savings of private nonfinancial corporations to GDP increased from 8.5% in 2011-12 to 5% in 2013-14.
- The combined revenue deficits of the centre and states declined from 4.1% in 2011-12 to 3.7% (RE) in 2012-13 and further to 2.9% (BE) in 2013-14.
- In line with the income approach to GDP, the GVA at basic prices in a year can be expressed as the sum of the compensation of employees (CE), operating surplus (OS) / mixed income of the self employed (MI), consumption of fixed capital (CFC) and taxes net of subsidies on production. CE is the composite value of wages and salaries paid in the sector, including the social contributions made by the employer, representing the income share of employees in the GVA. In the organized sector, OS is the difference between net value added and compensation of employees.
- As a result of the existence of unincorporated enterprises and household industries in the unorganized sector, which either do not maintain accounts or are wholly managed by self-employed workers, net value added (NVA) cannot be separated as income of labour and entrepreneurship. This necessitated the introduction of an item called mixed income of self employed to complete the account.
- In the agricultural sector, CE represents only the share of wages to hired labour and hence the total returns to farmers working on their own fields/fields hired by them, becomes part of MI.
- Hence it is difficult to relate the employment share in agriculture to CE in agriculture. The presence of a large unorganized segment in manufacturing and certain services also makes it difficult to establish correspondence between their employment shares and the CE to GVA ratios. It may be noted that the employment share of the construction sector is higher than its GVA share, and the same gets reflected in the sector’s CE to GVA ratio. Apart from agriculture, construction is the only sector whose employment share is higher than GVA share. As per the AE for 2014-15, the growth in construction is gradually picking up, which should auger well for employment generation.
- During 2012-13 to 2013-14, the average growth in per capita income, i.e. 3% as per the new series, is much higher than the corresponding growth of 2.4% presented by the old series.
- The first nine months of 2014-15 have witnessed some major policy reforms in the subsidy regime; the modified direct benefit transfer scheme has been launched; the new domestic gas pricing policy has been approved; and diesel prices have been deregulated. An Expenditure Management Commission has been constituted to look into various aspects of expenditure reforms to achieve the goal of fiscal consolidation. It will review the allocative and operational efficiencies of government expenditure to achieve maximum output.
