Government is set to release the first advance estimates of national income, GDP, and other macroeconomic figures today.
Amid a six-quarter straight fall in GDP growth rate, the government is set to release the first advance estimates of national income, GDP, and other macroeconomic figures today. Agencies such as Moody’s and India’s central bank – RBI – have recently cut India’s growth projections citing various reasons. Saying government measures do not address the widespread weakness in consumption demand, Moody’s slashed India’s economic growth forecast to 5.6 per cent for 2019, while the RBI at its December MPC meet pegged India’s economic growth forecast down to 5 per cent for the current fiscal. Now, looking at the trend, the government’s advance estimates may follow the same line as well.
Advance estimates are based on benchmark indicators, such as the Index of Industrial Production (IIP), which are used sector-wise to find an extrapolated version of what happened in the economy in the first eight months of the fiscal year. This also includes the performance of private companies.
For the advance estimates of GDP, which are required to be compiled in the months of January-February, the advance estimates are based on Kharif harvest and rabi sowings. The advance estimates of crop production are released at quarterly periodicity, beginning with the first advance estimates of Kharif production in September.
In the case of livestock sub-sector, estimates of production, mainly in the form of targets or likely projections are available for milk, egg, and wool, from the Department of Animal Husbandry, Ministry of Agriculture, based on the data received from the Animal Husbandry Departments of States. However, with the introduction of the Goods and Services Tax (GST) from July 2017, and consequent changes in the tax structure, the total tax revenue used for GDP compilation includes non-GST revenue and GST revenue.
Meanwhile, India’s core sector contracted for the fourth consecutive month in November and the industrial production contracted continuously for the three months till October 2019. The eight infrastructure industries grew zero per cent in April-November as compared to 5.1 per cent in the same period a year earlier. In the same line, the GDP growth rate fell to 4.5 per cent in Q2 FY20 from a six-year low growth rate of 5 per cent in the first quarter.