The Capital Coefficient Matrix for India 1980-1992-93

The input coefficient matrix, showing the input use structure (A matrix) of the Indian economy, is brought out regularly by the Central Statistical Organisation (CSO). However, the capital coefficient matrix (8 matrix) showing the capital structure of the various sectors of the economy is not published regularly by any official agency. Earlier, in the decades of the sixties and seventies, some individual scholars estimated it and used it for growth models or for investment planning exercises. Of late however, there seems to be no individual attempt too at estimating the capital coefficient matrix, which can be particularly useful in estimating the type of investment required for particular growth targets. The following paper is based on an attempt to construct the capital coefficient matrix for India. It is presented in two parts. The first part reviews the methodology of the earlier estimates of the capital matrix in India and tries to select the appropriate methodology for constructing a capital matrix useful for investment planning. The second part of the paper deals with the actual empirical estimation of the capital matrix, the data used and the adjustment made.