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Base year for GDP changed,Indian economy grew at 6.9%;

P Chidambaram says credit isall P!"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.! per cent.

"imilarly the economic growth rate for 2012-13 has been re#ised upwards to $.1 per

cent compared with 4.$ per cent estimated earlier.

%hese changes follow a re#ision in the base for calculating national accounts to 2011-

12 from 2004-0$.

%he base year was last re#ised in &anuary 2010.

'(eal )*+ or )*+ at constant ,2011-12 prices stands at (s 92. la/h crore and (s

99.2 la/h crore respecti#ely for the years 2012-13 and 2013-14 showing growth of

$.1 percent during 2012-13 and 6.9 percent during 2013-14 said a release.

%he change in the base year and also the conceptual framewor/ the release said 'will

impro#e ease of understanding ,data for analysis and facilitate international

compatibility.

%he new series it said will also affect a wide range of indicators li/e trends in public

ependiture taes and public sector debt that are con#entionally analysed in terms of

their ratios to nominal )*+.

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owe#er the release said the le#el of re#ision in the present base re#ision 'is not

large enough to affect any of these ratios significantly.

oreo#er the official press note said that the )ross *omestic +roduct ,)*+ at factor

cost will no longer be discussed instead )ross alue Added ,)A will be analysed

in releases.

'As is the practice internationally industry-wise estimates will be presented as )A at

basic prices while )*+ at mar/et prices will henceforth be referred to as )*+.

Kamlesh Rao, CEO, Kotak Securities:

%he 5" has released the re#ised )*+ numbers for the past two years ta/ing 2011-

12 as the base year. %he re#isions happen e#ery $ years. %he 2012-13 )*+ growth has

been re#ised to $.17 from 4.$7 earlier and the 2013-14 number has been re#ised to a

substantial 6.97 as against 4.!7 earlier. %his will increase the si8e of economy.

ar/ets fell on the last day of the wee/ largely on the bac/ of worse-than-epected

asset uality numbers declared by ban/s : both public and pri#ate. %he 5oal ;ndia

<" attracted bids of 1.2 the si8e of the issue and that entailed an amount of about

(s.240bn.

%he fiscal deficit has come in at (s $.32 la/h crore during April-*ecember of 2014-

1$ surpassing a full-year=s >? of (s $.31 la/h-crore by 0.27. <or the corresponding

period last year the deficit was 93.97 of the full-year >?. %he higher deficit is largely

because of the lower-than-epected re#enues. <or the first nine months of 2014-1$

ta re#enue of the 5entre has been (s $.4$ la/h-crore about $$.7 of the full-year

>? of (s 9.!! la/h-crore. <or April-*ecember last year it was higher at $.67 of the

full-year target. ?penditure for the period stood at 6.97 of >? as against 69.97 in

the corresponding period of <@14.

)oing ahead there are tail winds for the re#enues in the form of higher dis-in#estment

proceeds ,including 5; telecom spectrum sale and further income from the hi/e in

ecise duties for petro and diesel. Apart from these the last uarter normally sees a

large proportion of ta re#enues accrue to the )o#ernment. owe#er in case of a

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re#enue shortfall the )o#ernment may need to resort to spending cuts with a #iew to

meet the fiscal deficit target of 4.17.

)ross sa#ing during 2011-12 is estimated at (s 29.9 la/h crore and the estimates for

years 2012-13 and 2013-14 are (s 31. la/h crore and (s 34. la/h crore respecti#ely.

%he rate of )ross 5apital <ormation at constant ,2011-12 prices howe#er has

decreased from 3!.2 per cent in 2012-13 to 33.4 per cent in 2013-14.

;t further added that the per capita income at current prices has been estimated at (s

64316 (s !1$93 and (s 03 for the years 2011-12 2012-13 and 2013-14

respecti#ely.

As per the new series the nominal Bet Bational ;ncome ,BB; for 2011-12 stands at

(s !.$ la/h crore while the estimates for 2012-13 and 2013-14 are (s .4la/h crore

and (s 100.6 la/h crore respecti#ely showing an increase of 12.! per cent and 13.!

per cent respecti#ely.

%he )ross Bational *isposable ;ncome ,)B*; at current prices is estimated as (s

90.6 la/h crore for 2011-12 while the estimates for 2012-13 and 2013-14 stand at

102.2 la/h crore and (s 116.0 la/h crore respecti#ely.

‘Revised GDP proves UPA put ecoom! "ack o #ro$th path%

<ormer <inance inister + 5hidambaram today said the re#ised )*+ data which has

pegged the growth rate for 2013-14 at 6.9 per cent conclusi#ely establishes that the

C+A go#ernment put the economy bac/ on the growth path.

'%he data released today and the other economic indicators conclusi#ely establish that

the C+A go#ernment succeeded in substantial measure on all the four obDecti#es

5hidambaram said in statement.

e said during his tenure as the <inance inister since August 2012 till ay 2014

the go#ernment was successful in achie#ing its obDecti#es of fiscal consolidation

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containing current account deficit ,5A* moderation in inflation and putting the

economy bac/ on the growth path.

'; am happy that the )o#ernment has released the re#ised )*+ data. ;t should put an

end once and for all time to the misconcei#ed charge that the C+A go#ernment had

mismanaged the economy he added.

%he re#ised estimate of <@14 economic growth was based on a new calculation

method of national accounts with base year changed to 2011-12 from 2004-0$ earlier.

?arlier the <@14 growth rate was proDected at 4.! per cent.

Also the economic growth rate for 2012-13 has been re#ised upwards to $.1 per cent

compared with 4.$ per cent estimated earlier.

'Eith the )*+ data for 2012-13 and 2013-14 it will be clear that the 10 years of the

C+A go#ernment recorded the highest decadal growth since ;ndependence. ; wish

successor go#ernments will aim to better the C+A=s record.

'; sincerely hope that the go#ernment=s leaders will stop repeating the Dibe of sub-$

per cent growth in the last two years 5hidambaram added.

e further said that there is much wor/ to be done and the opposition will help the

go#ernment.

';t is up to the go#ernment to reach out to e#eryone build consensus and wor/

toward achie#ing higher growth in the years to come he said.

1. Analyse the case

2. Ehat changes are made in )*+ calculationF

3. Ehat are the impact on ;ndian ?conomy after these changesF

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4. *o you thin/ the latest )*+ figures are C+AGs triumph as + 5hidambaram

claimsF

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