REVISIONS IN INDIAS GDP ESTIMATES

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REVISIONS IN INDIAS GDP ESTIMATES

• Ramesh Kolli,
• Central Statistical Organisation

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Releases

• The CSO of the Ministry of Statistics and
  Programme Implementation releases
• Quarterly estimates of GDP with a lag of 3 months
• annual national accounts statistics
• Advance Estimates (AE) of annual national income
  on 7th February (2 months before the year closes)
• Update of AE on 30th June alongwith Q4 estimates
• Quick Estimates (QE) on 31st January, next year
• Revised Estimates on 31st January, every
  following year

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REVISION POLICY

• Quarterly estimates
• Quarterly GDP estimates/sectoral growth rates are
  not revised till the release of Q4 data (Q1, Q2
  and Q3 growth rates are revised first time with
  Q4 data)
• Thereafter, Quarterly GDP estimates are revised
  only alongwith the corresponding annual estimates
• The quarterly GDP estimates are always made
  consistent with the annual GDP estimates.
• The quarterly data are retroactively revised by
  spreading differences equally over the quarters
  on pro-rata basis or the annual estimates are
  apportioned on the basis of performance of
  indicators in the four quarters of the year, at
  detailed level and in various sectors of the
  economy

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• Annual Estimates
• The annual GDP estimates undergo revision over
  three years
• Revisions are dealt with separately
• (i) arising out of methodological, definitional
  changes and changes in data sources or
  availability of long-term survey/census results
• dealt with at the time of introduction of new
  series of national accounts (present policy is
  every 5 years.)
• The changes made in the new series of national
  accounts are discussed in Advisory Committees,
  announcement in working groups, Standing
  Committees for specific areas, seminars,
  conferences organized by the Indian Association
  for Research in National Income and Wealth, etc.
• All changes are also discussed in the Advisory
  Committee on National Accounts Statistics, before
  they are introduced.
• At the time of introducing the new series, a
  publication is brought out by the CSO, explaining
  the changes made in the national accounts
  statistics.

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• (ii) arising out of revisions in data made by the
  
• source agencies
• These Revisions are explained through a special
  Section in the CSOs annual publication,
  National Accounts Statistics
• The CSO examines the revisions made by the source
  agencies and does not unilaterally adopt the data
  in the compilation of national accounts, if they
  are not consistent with other sets of data.

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REVISIONS IN GDP ESTIMATES

• Annual estimates

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Table 3 Year to Year Growth Rates in GDP
Estimates (at 1993-94 prices)
AE Advance Estimate (released 2 months
before the close of the year) Revd. Updates
of Advance Estimates (released alongwith Q4
estimates, 3 months after the
close of the year)  
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Table 1 Growth Rates of QGDP estimates, 1996-97
to 2003-04
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Availability of data at different points of time
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USERS VIEWS ON REVISIONS

• a number of private organisations and research
  institutions also release forecasts
• These forecasts are based on macro-models,
  assumptions or targets.
• the growth rates forecast by these independent
  institutions vary considerably among themselves
  and with the subsequently released CSOs advance
  estimates
• Some users, however, inadvertently attribute
  these variations in growth rates to the CSO
• These revisions in the GDP growth rates made from
  the beginning of the financial year (initially by
  the independent institutions and subsequently by
  the CSO over a period of 3 years) generate
  discomfort in the minds of users of data

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MANAGING REVISIONS

• The CSO investigates the direction and magnitude
  of revisions between preliminary and final data.
• A Section of the CSOs publication, National
  Accounts Statistics entitled Notes on
  methodology and revisions in the estimates gives
  details of source data and the reasons for
  revisions in estimates.

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Managing revisions

• For the sake of illustration, the statement
  giving the reasons for the revision in the
  estimates of GDP for the year 2000-01, which was
  included in the National Accounts Statistics,
  2002 is given at Appendix 1.
• The large revision made in the GDP estimates for
  the year 2000-01 attracted considerable media
  attention and criticism.
• In addition to giving the reasons for revisions
  in the Publication, National Accounts
  Statistics, the CSO issued a Press Note,
  Methodology For Computing Advance Estimates
  Quick Estimates Of National Income, clarifying
  the methodological aspects and the databases used
  in the compilation of estimates

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• Thanks