Modi Govt revises GDP growth downward for 2014-15 to 7.2%

NEW DELHI: Government has marginally revised downward the economic growth for 2014-15 to 7.2% from the earlier estimate of 7.3% after factoring in latest data on agriculture and industrial production.

“The real GDP or GDP at constant (2011-12) prices for the years 2014-15 and 2013-14 stands at Rs 105.52 lakh crore and Rs 98.39 lakh crore, respectively, showing growth of 7.2% during 2014-15, and 6.6% during 2013-14,” said Central Statistics Office’s (CSO) revised estimates of national accounts released on Friday.

GDP growth rate for 2013-14 has also revised downwards to 6.6% from earlier estimate of 6.9%. According to the statement, estimates of GDP and other aggregates for the years 2011-12 to 2013-14 have also undergone revision due to use of latest available data on agricultural production and industrial production.
Last year, the CSO had estimated the GDP growth rate for 2014-15 and 2013-14 at 7.3% and 6.9%, respectively.
The office said in terms of real GVA (Gross Value Added) at constant (2011-12) basic prices, there has been a growth of 7.1% in 2014-15 as against growth of 6.3% in 2013-14. The GVA for 2014-15 was earlier estimated at 7.2%.
GVA as a concept was introduced by the CSO last year to measure value addition in the economy. The downward revision in GVA for 2014-15 is on account of subdued performance of secondary sector comprising manufacturing, electricity, gas, water supply & other utility services, and construction.
The growth rate in secondary sector estimated at 5.4% down from earlier projection of 6.3%. However the growth rate for the primary (farm and allied activities) and tertiary (services) sectors have been revised upwards to 1.3% and 10.3%, from earlier estimates of 0.3 and 10.2% respectively.
According to national accounts data, the per capita net national income at current prices is estimated as Rs 79,412 and Rs 86,879, respectively for the years 2013-14 and 2014-15.
Similarly the per capita Private Final Consumption Expenditure at current prices, for the years 2013-14 and 2014-15 is estimated at Rs 52,022 and Rs 56,772, respectively. The gross saving during 2014-15 is estimated as Rs 41.17 lakh crore as against Rs 37.25 lakh crore during 2013-14. The rate of gross saving to Gross National Disposable Income for the year 2014-15 is estimated as 32.3%, the same as in 2013-14.
The highest contributor to the gross saving is the household sector, with a share of 57.8% in the year 2014-15. However, the share has declined from 63.4% in 2013-14 to 57.8 in 2014-15. This decline can be attributed to the decline in household savings in physical assets, which has declined from Rs 14.61 lakh crore in 2013-14 to Rs 13.79 lakh crore in 2014-15, it said.
On the other hand, the share of Non-Financial Corporations has increased from 32.7% in 2013-14 to 37.2% in 2014-15. The share of Financial Corporations increased marginally from 7.9% in 2013-14 to 8.2% in 2014-15, while the dis-saving of General Government has decreased from 4% in 2013-14 to 3.2% in 2014-15, it said.
In terms of Gross Capital Formation (GCF) an indicator of investment (at current prices), the highest contributor is Non-Financial Corporations, with the share rising steadily from 45.7% in 2011-12 to 52.0% in 2014-15.
Share of household sector in GCF is also significant, but has declined from 43.4% in 2011-12 to 33.9% in 2014-15. The share of General Government in GCF has increased from 9.6% in 2011-12 to 12.9% in 2014-15.
Within the GCF at current prices, the Gross Fixed Capital Formation (GFCF) amounted to Rs 38.44 lakh crore in 2014-15 as against Rs 35.64 lakh crore in 2013-14. The rate of GFCF to GDP at current prices was 30.8% in 2014-15 as compared to 31.6% in 2013-14. The change in stocks of inventories, at current prices, increased from Rs 1.80 lakh crore in 2013-14 to Rs 2.21 lakh crore in 2014-15, while the valuables increased from Rs 1.63 lakh crore in 2013-14 to Rs 1.93 lakh crore in 2014-15.

The rate of Gross Capital Formation to GDP at constant (2011-12) prices has decreased marginally from 36.2% in 2013-14 to 35.9% in 2014-15.

With PTI