Currently, a divergence is observed between the aggregate of gross state domestic products (GSDPs) and the gross domestic product (GDP) of India. Though a thorough exercise is required to find out the reason, this difference has public policy implications for the country.
The divergence between the recorded output of Indias constituent states put together and the national output, which is taken to signify the size of the economy, gives rise to doubt if the GDP numbers put out by the Central Statistics Office (CSO) accurately capture the countrys economic growth. This divergence, if found true, could complicate assessments of the outcomes of various policy measures.
In 2019-20, as per available official data, Indias 20 states and Union territories (UTs) combined recorded growth of 6.9%, compared to national-level GDP growth of 4.2%. There have been reasonable differences between the two numbers in the past, and after the introduction the 2012 series of the National Accounts Statistics (NAS), this difference averaged 0.3 percentage points over fiscal years 2012-13 through 2018-19. The added-up GSDP growth of states/UTs has been consistently higher than that of national GDP during the last five years. But the growth difference of 2.7 percentage points in 2019-20 is not only abnormally high, it also suggests that the deceleration of growth at the sub-national level was not as sharp as the national number may suggest.
In India, states release only annual data of their GSDP and not quarterly data. Also, they do not provide GSDP figures with a break-down of consumption and investment. However, in their annual GSDP sectoral estimates, not only do they follow the same methodology of data compilation used by the National Statistical Agency (NSA), but the data is also discussed and vetted by the NSA. The comparable estimates of GSDP for 2015-16 to 2017-18 that the NSA prepared for the Finance Commission indicate that states estimates were quite consistent with these; specifically for 21 states, the ratio of one to the other varied between 0.99 and 1.01. Even the average annual growth at current prices of the NSAs comparable GSDP for 2015-16 to 2017-18 at 12% was a just a shade lower than 12.4% for the aggregated GSDP as compiled by the states themselves. This suggests that state estimates did not suffer from any methodological or estimation flaws. Further, the aggregated GSDP of states/UTs was also aligned with national GDP in 2011-12, the first year of the new NAS series, with the ratio of aggregated GSDP of sub-national constituents being 1.012. Aggregated GSDP growth after that was expected to show a similar growth trajectory. The gap of 2019-20, however, raises a question: Is there an emerging disconnect?
Before we look at the implications and ways of resolving it, it is important to look at two issues. The ministry of company affairs MCA-21 data for corporate output across all sectors and the data on railways, financial institutions, public administration and defence is allocated by the NSA to various states. Their respective directorates of economics and statistics incorporate that data in their overall compilation of GSDP. Each states share differs, and tends to exceed 60% of total GSDP for most. Hence, differences in GSDP growth can be inferred to arise from only that part of GSDP which is solely in the states domain. Often, discrepancies in GDP estimates (including sharp revisions) get attributed to the informal sector. The overall share in GDP of households and non-profit institutions serving households, which is the informal sector, has been around 45%, and this is almost equally distributed across agriculture, industry and services. Though there are differences in growth across those three broad sectors, industrial growth is significantly more robust from a data perspective.
Some questions arise in this regard. Has the issue of a sharp, persistent and secular deceleration of GDP growth been overplayed? The average annual growth of GSDP of Indias 20 major states/UTs during 2012-13 to 2018-19 was 7.15%. This measure of growth in 2019-20 at 6.89% was only a shade lower than 6.97% achieved in 2018-19, and showed a marginal deceleration from the trend medium-term growth. Seven of these states (six of them major), namely Tamil Nadu, Haryana, West Bengal, Sikkim, Bihar, Madhya Pradesh and Andhra Pradesh recorded higher growth in 2019-20 than the previous year. Could it be that Indian states are making a more accurate assessment of the growth situation on the ground? After all, considerable changes have taken place in the composition of the economy over the last five years, especially in the informal sector.
The methodology of the survey used by states to gather data has the approval of the National Sample Survey Organization (NSSO). The NSSO, however, lacks the expert capacity to supervise these surveys, and this makes data robustness hard to ensure. Should this bottleneck not be eased for us to obtain clarity?
If the states GSDP reflects the situation correctly, has Indias unorganized sector bounced back faster after demonetization (in 2016) and introduction of the goods and services tax (in 2017) than anecdotal data suggests? And if this is so, will it not be prudent to ensure that the sector gets access to capital as part of the countrys stimulus strategy? And finally, will the 15th Finance Commission use GSDP or CSO data in deciding on its devolution of resources to states?
R. Gopalan and Manak C. Singhi are respectively, former secretary in the department of economic affairs, ministry of finance, and former senior adviser at ministry of finance, Government of India.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Link:
An odd divergence between India and its constituents - Mint
- NSA fears quantum computing surprise: 'If this black swan event happens, then we're really screwed' - Washington Times - March 27th, 2024 [March 27th, 2024]
- The NSA Warns That US Adversaries Free to Mine Private Data May Have an AI Edge - WIRED - March 27th, 2024 [March 27th, 2024]
- Five ways to implement zero-trust based on NSA's latest guidance - SC Media - March 27th, 2024 [March 27th, 2024]
- Intel analyst shared classified information on Discord, investigators say - The Washington Post - March 27th, 2024 [March 27th, 2024]
- Water Systems Vulnerable To Cyber Attacks, NSA And EPA Warn Governors - Forbes - March 27th, 2024 [March 27th, 2024]
- Amritpal Singhs mother, kin of other NSA detainees go on hunger strike, want them to be shifted to Punjab jail - The Tribune India - February 24th, 2024 [February 24th, 2024]
- Rob Joyce leaving NSA at the end of March - CyberScoop - February 24th, 2024 [February 24th, 2024]
- NSA cyber director to step down after 34 years of service - Nextgov/FCW - February 24th, 2024 [February 24th, 2024]
- Behind Khattar govts U-turn on NSA against farm leaders, fear of rural blowback, Congress gain - The Indian Express - February 24th, 2024 [February 24th, 2024]
- Payday dispute prompts maintenance worker walkout at NSA Naples - Stars and Stripes - February 24th, 2024 [February 24th, 2024]
- CISA, NSA, and FBI Warn of Chinese Cyber Hacking Army The Presidential Prayer Team - The Presidential Prayer Team - February 24th, 2024 [February 24th, 2024]
- Cyber Security Headlines: Microsoft takes another hit, Energy giant hit by ransomware, the NSA is secretly buying your ... - CISO Series - January 30th, 2024 [January 30th, 2024]
- India now cooperating with Nijjar probe: Canada's NSA - IndiaTimes - January 30th, 2024 [January 30th, 2024]
- Google, WhiteSnake, Outlook, NSA, Juniper, Jason Wood, and More SWN #358 - SC Media - January 30th, 2024 [January 30th, 2024]
- Readout of NSA Jake Sullivan's Meetings with PM Srettha and DPM/FM Parnpree - US Embassy in Thailand - USEmbassy.gov - January 30th, 2024 [January 30th, 2024]
- NSA Admits Secretly Buying Your Internet Browsing Data without Warrants - The Hacker News - January 30th, 2024 [January 30th, 2024]
- Readout of NSA Jake Sullivan's Meeting with CCP Politburo Member, Director of the Office of the Foreign Affairs ... - US Embassy & Consulates in... - January 30th, 2024 [January 30th, 2024]
- Former NSA Saint has a chance to become repeat Super Bowl champion - The Suffolk News-Herald - Suffolk News-Herald - January 30th, 2024 [January 30th, 2024]
- NSA is buying Americans internet browsing records without a warrant - TechCrunch - January 30th, 2024 [January 30th, 2024]
- As NSA buys up Americans' browser records, Uncle Sam is asked to simply knock it off - The Register - January 30th, 2024 [January 30th, 2024]
- NSA buys sensitive data on Americans without any court order - KJZZ - January 30th, 2024 [January 30th, 2024]
- NSA Veteran Teresa Shea Joins Board of Directors of Two Six Technologies - ExecutiveBiz - January 30th, 2024 [January 30th, 2024]
- How the FBI, NSA are preparing for deepfakes and misinformation issue ahead of 2024 elections - CNBC - January 14th, 2024 [January 14th, 2024]
- AI is helping US spies catch stealthy Chinese hacking ops, NSA official says - CyberScoop - January 14th, 2024 [January 14th, 2024]
- AI aids nation-state hackers but also helps US spies to find them, says NSA cyber director - TechCrunch - January 14th, 2024 [January 14th, 2024]
- NSA Director Paul Nakasone to Step Down in Early February - Bloomberg - January 14th, 2024 [January 14th, 2024]
- NSA says cybersecurity will gain many benefits with generative AI - ReadWrite - January 14th, 2024 [January 14th, 2024]
- FBI and NSA directors discuss their concerns about AI - WCBE 90.5 FM - January 14th, 2024 [January 14th, 2024]
- Looking back at 2023 with the NSA's Rob Joyce and Morgan Adamski - CyberScoop - January 14th, 2024 [January 14th, 2024]
- NSA: Benefits of generative AI in cyber security will outweigh the bad - ITPro - January 14th, 2024 [January 14th, 2024]
- AI Identified as Emerging Threat in Cyber Crime by NSA Director - CoinGape - January 14th, 2024 [January 14th, 2024]
- AI is helping China-backed hackers but it's also helping to hunt them down, NSA says - TechRadar - January 14th, 2024 [January 14th, 2024]
- Top 10 misconfigurations: An NSA checklist for CISOs - The Stack - October 20th, 2023 [October 20th, 2023]
- CISA and NSA Issues New Identity and Access Management Guidance for Vendors - TechRepublic - October 20th, 2023 [October 20th, 2023]
- How to Protect Against Evolving Phishing Attacks - National Security Agency - October 20th, 2023 [October 20th, 2023]
- NSA Shares Recommendations to Advance Device Security Within ... - National Security Agency - October 20th, 2023 [October 20th, 2023]
- Nansemond-Suffolk tennis falls to Norfolk Academy Thursday - The ... - Suffolk News-Herald - October 20th, 2023 [October 20th, 2023]
- NSA calls for a 'root and branch' review of Red Tractor - Farmers Guardian - October 20th, 2023 [October 20th, 2023]
- Israel's NSA warns of US intervention as Gaza conflict escalates - IndiaTimes - October 20th, 2023 [October 20th, 2023]
- The U.S. government is still in its Tumblr era. - Slate - October 20th, 2023 [October 20th, 2023]
- Biden's Cyber Command and NSA nominee seen as a pick for continuity - The Record from Recorded Future News - July 17th, 2023 [July 17th, 2023]
- 5 Reasons to Work for the NSA - ClearanceJobs - ClearanceJobs - July 17th, 2023 [July 17th, 2023]
- I will do my best as NSA: Ribadu promises - FRCN HQ - Federal Radio Corporation of Nigeria - July 17th, 2023 [July 17th, 2023]
- Plateau killings: Reps ask NSA to declare national emergency - TheCable - July 17th, 2023 [July 17th, 2023]
- 7th Deputy NSA Meeting of Colombo Security Conclave held in ... - ANI News - July 17th, 2023 [July 17th, 2023]
- Young shepherd from region wins NSA North Sheep trophy ... - Darlington and Stockton Times - July 17th, 2023 [July 17th, 2023]
- HBO film based on NSA leaker Reality Winner slated for May 29 ... - Military Times - May 18th, 2023 [May 18th, 2023]
- Tina Satter on why her NSA whistleblower film Reality is stranger than fiction - Financial Times - May 18th, 2023 [May 18th, 2023]
- Gen. Paul Nakasone Plans to Step Down as NSA Director ... - Executive Gov - May 18th, 2023 [May 18th, 2023]
- Readout of NSA Jake Sullivan's Meeting with CCP Politburo ... - US Embassy & Consulates in China - May 18th, 2023 [May 18th, 2023]
- Young sheep farmers to be given genetic boost by new NSA giveaway - The Scottish Farmer - May 18th, 2023 [May 18th, 2023]
- Sydney Sweeney wanted to be challenged by Reality: Its a different muscle playing someone who is real [Exclusive Video Interview] - Yahoo... - May 18th, 2023 [May 18th, 2023]
- Intercepted: The Biggest Whodunnit of the Century - The Intercept - May 18th, 2023 [May 18th, 2023]
- Personal injury + the No Surprises Act - Chiropractic Economics - May 18th, 2023 [May 18th, 2023]
- PM Narendra Modi e-inaugurating new office complexes of CBI at Shilong, Pune and Nagpur, commemorating the CBI diamond jubilee on Monday. Also seen... - April 4th, 2023 [April 4th, 2023]
- Special Collection Service - Wikipedia - March 31st, 2023 [March 31st, 2023]
- What is the NSA and how does it work? - SearchSecurity - February 5th, 2023 [February 5th, 2023]
- Watch: NSA Ajit Doval is Ambitious, Very Good at Sniffing Power and Being on the Right Side of itAS Dulat - The Wire - December 21st, 2022 [December 21st, 2022]
- Shockwaves win another championship, this time at the NSA Fresno Pilgrimfest - Lompoc Record - December 12th, 2022 [December 12th, 2022]
- EFCC secures forfeiture of N755m, luxury assets from ex-AGF, former aide to NSA The Nation Newspaper - The Nation Newspaper - November 23rd, 2022 [November 23rd, 2022]
- What is the National Security Agency? - Norwich University - October 25th, 2022 [October 25th, 2022]
- Cyber Security Today, Oct. 19, 2022 A warning from the NSA about nation-state attacks, and more - IT World Canada - October 21st, 2022 [October 21st, 2022]
- In the Alphabet Soup of Regulations, the NSA, GFE and AEOB Have Yet to Coalesce - RACmonitor - October 6th, 2022 [October 6th, 2022]
- Do not ignore any communication shared by NSCS, NSA: PM Modi to ministers - The Hindu - October 6th, 2022 [October 6th, 2022]
- NSA Announces Date of the National Cryptologic Museum Grand Opening - National Security Agency - October 2nd, 2022 [October 2nd, 2022]
- NSA and ACLU may face off in the Supreme Court over Wikipedia - Grid - October 2nd, 2022 [October 2nd, 2022]
- The NSA is Here to Help | Decipher - Duo Security - September 27th, 2022 [September 27th, 2022]
- Hollen, Raskin Join with NSA Bethesda Fire Fighters, IAFF Leaders to Highlight Progress on Efforts to Improve Base Conditions, Build New Facility |... - September 27th, 2022 [September 27th, 2022]
- CISA, FBI, NSA, Treasury, Cyber Command, and International Partners Release Advisory on Malicious Cyber Actors Affiliated with Iranian Government... - September 20th, 2022 [September 20th, 2022]
- NATFORCE: Buhari Finally Disbands Security Outfit After Senate Ignored NSA To Recognize Body The Whistler Newspaper - The Whistler Nigeria - September 20th, 2022 [September 20th, 2022]
- China Accuses NSA of Hacking Its Military Research University - VICE - September 9th, 2022 [September 9th, 2022]
- Behind the Toque: An Interview with NSA Noodle Bar Executive Chef Brooke Apfelbaum - greenpointers.com - September 9th, 2022 [September 9th, 2022]
- In the Garden: Tour gives Omahans a chance to see how a 'Bloom Box' works - Omaha World-Herald - September 9th, 2022 [September 9th, 2022]
- Three area teams pickup wins to start football season - The Suffolk News-Herald - Suffolk News-Herald - September 9th, 2022 [September 9th, 2022]
- NSA to reveal identities of big men behind oil theft in Nigeria Presidency - Daily Post Nigeria - August 22nd, 2022 [August 22nd, 2022]
- Former US Cyber Command and NSA chief makes the case for a cyber competition strategy | The Strategist - The Strategist - August 22nd, 2022 [August 22nd, 2022]
- Inaugural India-Central Asia NSA meeting to be held in December - WION - August 22nd, 2022 [August 22nd, 2022]
- Home | Open Source @ NSA - August 8th, 2022 [August 8th, 2022]
- Kennesaw State named top institution for cybersecurity outreach - Kennesaw State University - August 8th, 2022 [August 8th, 2022]
- US city of Boston to mark 75th anniversary of India's Independence with two-day extravaganza - NewsDrum - August 8th, 2022 [August 8th, 2022]