Dubious firms in MCA-21: Govt says no impact on GDP numbers

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Published: May 9, 2019 4:29:55 AM

MoSPI said the recent NSSO exercise to bring out a technical report on the services sector was commissioned by it to “understand the data gaps and take remedial steps, while undertaking the new base revision exercise for the proposed 2017-18 series.”

Dubious firms, MCA 21, Govt, impact, GDP numbers, GDP, GVA, NSSO, MoSPI, economy news, financial express, financial express newspaper, financial express today Dubious firms in MCA-21: Govt says no impact on GDP numbers

After a latest study by the National Sample Survey Office (NSSO) suggested that over a third of companies that are part of the MCA-21 database and are used for the computation of national income may have been dubious, the government on Wednesday insisted that any such assumption had “no impact” on the existing GDP/GVA estimates for the corporate sector.

“It is emphasised that there is no impact on the existing GDP/GVA estimates for the corporate sector as due care is taken to appropriately adjust the corporate filings at the aggregate level, based on the paid-up capital,” the ministry of statistics and programme implementation (MoSPI) said. The NSSO study suggested that in 12 months through June 2017, 36% of such MCA-21 companies could not be traced or were wrongly classified. The results of this NSS report will be “further examined by the advisory Committee before finalising the approach and methodology for the proposed 2017-18 series”.

MoSPI said the recent NSSO exercise to bring out a technical report on the services sector was commissioned by it to “understand the data gaps and take remedial steps, while undertaking the new base revision exercise for the proposed 2017-18 series.”

Justifying the use of the MCA-21 for the computation of GDP, the ministry said the issue of coverage, quality and timeliness of the MCA database vis-à-vis the annual survey of industries had been discussed in detail in the various meetings of the Advisory Committee on National Accounts Statistics and adopted only thereafter.

The GDP data raised concerns recently when the Central Statistics Organisation (CSO) effected a sharp spike in growth rate for 2016-17, the year that saw demonetisation, from 7.1% to 8.2% — the highest in the current NDA regime. In November last year, the data were revised to show the average annual growth rate between 2005-06 and 2013-14 stood at just 6.7%, against 7.7% recorded in the first four years of the NDA government. Even the Mundle panel, whose estimates of the UPA-era growth were junked by this government, had pegged the average expansion between FY05 and FY14 at 8%. According to the old series data, the UPA’s average growth rate was 7.7% in its 10 years through FY14.

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