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Some areas of concern about Indian Manufacturing Sector GDP estimation


  • Sapre, Amey

    () (Indian Institute of Technology)

  • Sinha, Pramod

    () (National Institute of Public Finance and Policy)


In this paper, we discuss some of the methodological issues involved in the computation of value addition in the manufacturing sector. We deal with (i) problems of blow-up of estimates (ii) choice of indicators in measuring output, and (iii) a possible misclassification of companies in the MCA21 database that can distort the GVA estimates. A sample based blow-up exercise shows that Paid-Up Capital and GVA contribution of firms have no one-to-one correspondence and the method can lead to overestimation of value addition. We construct an alternate method of blow-up by using representative industry GVA growth rates to scale up previous GVA estimates to account for data of unavailable companies. We show that a potential misclassification of companies in the MCA21 can also lead to significant distortion in GVA estimates.

Suggested Citation

  • Sapre, Amey & Sinha, Pramod, 2016. "Some areas of concern about Indian Manufacturing Sector GDP estimation," Working Papers 16/172, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:16/172
    Note: Working Paper 172, 2016

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    References listed on IDEAS

    1. Stefano Paternostro & Anand Rajaram & Erwin R. Tiongson, 2007. "How Does the Composition of Public Spending Matter?," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 47-82.
    2. Mundle, Sudipto & Chowdhury, Samik & Sikdar, Satadru, 2016. "Governance Performance of Indian States 2001-02 and 2011-12," Working Papers 16/164, National Institute of Public Finance and Policy.
    3. Pritchett, Lant, 1996. "Mind your P's and Q's : the cost of public investment is not the value of public capital," Policy Research Working Paper Series 1660, The World Bank.
    4. Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2008. "Public spending and outcomes: Does governance matter?," Journal of Development Economics, Elsevier, vol. 86(1), pages 96-111, April.
    5. Charles Oman & Christiane Arndt, 2006. "Governance Indicators for Development," OECD Development Centre Policy Insights 33, OECD Publishing.
    6. Marijn Verhoeven & Sanjeev Gupta & Erwin H Tiongson, 1999. "Does Higher Government Spending Buy Better Results in Education and Health Care?," IMF Working Papers 99/21, International Monetary Fund.
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    Cited by:

    1. Radhika Pandey & Ila Patnaik & Ajay Shah, 2017. "Dating business cycles in India," Indian Growth and Development Review, Emerald Group Publishing, vol. 10(1), pages 32-61, April.
    2. Rudrani Bhattacharya, 2016. "How does Supply Chain Distortion affect Food Inflation in India?," Working Papers id:11261, eSocialSciences.
    3. Bhattacharya, Rudrani, 2016. "How does Supply Chain Distortion affect Food Inflation in India?," Working Papers 16/173, National Institute of Public Finance and Policy.

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