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Some areas of concern about Indian Manufacturing Sector GDP estimation

Author

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  • Sapre, Amey

    (Indian Institute of Technology)

  • Sinha, Pramod

    (National Institute of Public Finance and Policy)

Abstract

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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    File URL: http://www.nipfp.org.in/media/medialibrary/2016/09/WP_2016_172.pdf
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    Cited by:

    1. Nagaraj, R. & Sapre, Amey & Sengupta, Rajeswari, 2020. "Four Years After the Base-Year Revision: Taking Stock of the Debate Surrounding India’s National Accounts Estimates," India Policy Forum, National Council of Applied Economic Research, vol. 16(1), pages 55-107.
    2. Radhika Pandey & Ila Patnaik & Ajay Shah, 2017. "Dating business cycles in India," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 10(1), pages 32-61, April.
    3. Tümer, Abdullah Erdal & Akkuş, Aytekin, 2018. "Forecasting Gross Domestic Product per Capita Using Artificial Neural Networks with Non-Economical Parameters," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 512(C), pages 468-473.
    4. Radhika Pandey & Amey Sapre & Pramod Sinha, 2020. "What Do We Know About Changing Economic Activity of Firms?," Studies in Microeconomics, , vol. 8(2), pages 149-169, December.
    5. Radhika Pandey & Ila Patnaik & Ajay Shah, 2019. "Business Cycle Measurement in India," Societies and Political Orders in Transition, in: Sergey Smirnov & Ataman Ozyildirim & Paulo Picchetti (ed.), Business Cycles in BRICS, pages 121-152, Springer.
    6. Bhattacharya, Rudrani, 2016. "How does Supply Chain Distortion affect Food Inflation in India?," Working Papers 16/173, National Institute of Public Finance and Policy.
    7. Rudrani Bhattacharya, 2016. "How does Supply Chain Distortion affect Food Inflation in India?," Working Papers id:11261, eSocialSciences.
    8. Pandey, Radhika & Patnaik, Ila & Shah, Ajay, 2019. "Measuring business cycle conditions in India," Working Papers 19/269, National Institute of Public Finance and Policy.

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