Estimation of GSDP based oin the New (2011-12) GDP Series-An Evaluation of Critical Comments and a Few Suggestions

This paper makes an attempt to have a detailed state-wise, sector-wise assessment of the changes that have occurred in the Gross State Value Added (GSVA or formerly known as Gross State Domestic Product, GSDP) estimations as per the 2011-12 series over the 2004-05 series. This paper finds that, at the aggregate level, the differences are l0% or less except for three major states, namely, Karnataka, Telengana and Uttarakhand wherein such differences have ranged from 10% to 21%. Sector-wise assessment reveals that major changes occurred in the relative share of several sectors, as in mining and quarrying, manufacturing, trade, etc., across states reflect the all-India picture, as the all-India estimates have been allocated to states based on certain chosen indicators.

Substantive part of the paper has, however, been devoted to closely examine Dholakia-Pandya (2017) critique on the GSVA revision and offer comments on each of them. Not only many of the criticisms offered by these authors fail to stand the test of empirical scrutiny, but the abandonment of 2011-12 GSVA base series will create serious differences between the national level estimates and the state level aggregates. On a balanced consideration, this paper argues that it is neither advisable nor is it necessary to abandon the 2011-12 series of GSDP evolved on the basis of the national level revision at this stage. Some of the limitations noticed in the GSVA estimation procedures can be easily corrected by the Central Statistics Office (CSO). This has been borne out by the analysis using data compiled from Bureau of Economic and Statistics of Government of Maharashtra.

Apart from these proposals, this paper present a fresh list of suggestions for improving the 2011-12 GSDP series and expanding the coverage of state-level estimates. Amongst them that has immediate relevance include: the CSO should adopt state specific indicators wherever indicators are used either for deflation purposes or for allocation devices or for carrying forward the benchmark estimates; and, whenever CSOprepares comparableGSVAestimates, its sources and actual numbers should be transparent and open to scrutiny at the state level so that the State Directorates get a sense of involvement and participation in their own estimates.