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Base Year Change Pushes GDP Growth & Per Capita Income
Feb 03, 2015

The economic growth rate was revised upwards to 6.9 per cent for 2013-14, as against 4.7 per cent estimated earlier, after the government updated the base year for measuring national accounts.

Key Facts

  • The higher growth rate, however, may not provide any cushion on the fiscal deficit front as size of economy has shrunk to Rs 113.45 lakh crore following the revision.

  • The Gross Domestic Product (GDP) growth rate for 2013-14 has gone up following adoption of the new series with base year 2011-12.

  • The government also introduced the new concepts like Gross Value Added (GVA) to the economy. Changes are aimed at improving the ease of data understanding for analysis and facilitate international compatibility.

  • The economic growth rate for 2012-13 has been revised upwards to 5.1 per cent from earlier estimate of 4.5 per cent. The previous estimates had put economic growth rate at sub-5 per cent level for the past two years.

  • The government is committed to meeting the fiscal deficit target of 4.1 per cent of the GDP in 2014-15 and its task might become tougher if the trend continues.

  • The government targets fiscal deficit as a proportion of the GDP at current market prices.

  • With an updated base year as well as a revised methodology for measuring economic growth, the Indian economy is estimated to have grown at a much faster 6.6 per cent in 2013-14 as against the earlier estimate of 4.7 per cent (old series) growth in gross domestic product at market prices

  • The growth is even sharper at 6.9 per cent in 2013-14, according to the new concept of gross value added at basic prices that was introduced by the Central Statistics Office.

  • Real GDP or GDP at constant (2011-12) prices stands at Rs 92.8 lakh crore and Rs 99.2 lakh crore, respectively, for the years 2012-13 and 2013-14, showing growth of 5.1 per cent during 2012-13, and 6.9 per cent during 2013-14.

  • The revised series is also expected to boost India’s growth prospects for 2014-15 where the Reserve Bank of India has projected a 5.5 per cent growth rate based on factor cost. India’s per capita income has also seen a sharp rise at Rs 80,388 in 2013-14 from Rs 71,593 in 2012-13 under the new series.

  • Increase in Per Capita Income: After changing the base year, India's per capita income (a gauge for assessing standard of living) is estimated to have risen to Rs 6,699 per month in 2013-14 from earlier estimate of Rs 6,198.33.

  • The base year was last revised in January 2010 and goes under revision every five years.

National Statistical Commission said the revised methodology is based on international standards and indicates that growth was not as dismal as was earlier projected to be.


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