Key Takeaways From GDP Data Users Conference: Motilal Oswal
Quality of quarterly estimates unsatisfactory, but may be the best outcome given limited resources.
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Motilal Oswal Report
The Ministry of Statistics and Programme Implementation hosted a GDP Data Users Conference on Friday, March 10, 2023, in New Delhi. Given below are the key highlights:
Quality of quarterly estimates unsatisfactory, but may be the best outcome given limited resources:
While estimating manufacturing gross value added on a quarterly basis, listed companies’ data is used to estimate the organized sector’s share, while Index of Industrial production data is used to estimate growth trends in the unorganised sector.
On a quarterly basis, estimates of the ‘trade, transportation and storage’ sector are largely based on listed companies’ data. Good and services tax data is also used here.
The limitation or inadequacy of IIP as an apt measure of industrial activity in the economy is well recognised. However, in the absence of any alternative, it is used in the estimation of unorganised manufacturing GVA on a quarterly basis. This limitation is corrected once the Annual Survey of Industries data is available, which is then incorporated to estimate annual GVA/GDP data at a later stage.
‘Discrepancies’ do not affect quality of GDP growth:
The estimation of GVA is more robust than that of GDP. Headline GDP is estimated by adjusting headline GVA with net product taxes. The components of GDP via the expenditure approach are estimated separately and the difference between headline GDP (arrived at using headline GVA and net product taxes) and components is entered as ‘discrepancies’. Higher or lower discrepancies, thus, do not affect the headline growth.
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