• UGI USER
  • Jan 06, 2024
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Growing Indian Economy –  National Statistical Office (NSO)

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News

  • The Indian economy is expected to grow by a strong 7.3% in the Financial Year 2023–24, according to the NSO, which is part of the Ministry of Statistics and Programme Implementation. This is in addition to the 7.2% growth rate that was predicted for the previous financial year.
  • NSO’s report was based on First Advance Estimates (FAE) of National Income for the fiscal year 2023–2024,
    • the construction industry is expected to grow by double digits by 10.7%.
    • It was noted that every economic sector had experienced growth of more than 6%, with the exception of the agriculture and related sectors, where growth is only expected to be 1.8%.
    • The benchmark-indicator approach is used to compile the advance estimates of national income, which are indicator-based.
    • It stated that the estimates for the prior year (2022–2023) are extrapolated using pertinent sector-specific performance indicators.
    • Data from numerous Ministries, Departments, and Private Agencies was used to prepare this report
Important Concepts

 Gross Domestic Product (GDP) =

●  Government expenditure + government investment + gross investment + private consumption + (exports-imports);

●  GDP maps the economy from the expenditure (or demand) side, by totaling all expenditures.

Gross Value Added (GVA):

●  GVA = GDP + subsidies on products – taxes on products.

●  Indicator depicts the economy from the supply side.

●  The “value-added” by various economic sectors, including services, industry, and agriculture, is mapped out by GVA.

First Advance Estimates (FAEs) of GDP:

●   Originally released in 2016–17, the FAEs are usually released by the end of the first week in January.

●  FAEs represent the “first” official projections of GDP growth for that fiscal year. Aside from that, they are also known as “advance” estimates since they are released well in advance of the end of the fiscal year, which runs from April to March.

●  The FAE is released shortly after the third quarter, or Q3, which ends in October, November, and December. However, they are missing the official Q3 GDP figures, which are released as part of the Second Advance Estimates (SAE) at the end of February.

●  Significance of FAEs:

○  The Union Finance Ministry uses FAE GDP estimates to determine the budgetary allocations for the upcoming fiscal year, which is the primary source of significance.

○  The nominal GDP’s growth rate as well as its absolute amount must be estimated when creating a budget.

○  This will also assist in the computation of inflation and real GDP.

○  The year-over-year variations in real and nominal GDP indicate the degree of inflation.

NOTE: Real GDP = nominal GDP – inflation rate.

●  FAE Calculation:

○  The Benchmark-Indicator method is the foundation for the Advance Estimates compilation process, according to the MoSPI.

○  This means that estimates for the prior year—2020–21 in this case—are extrapolated using pertinent metrics that represent the sectoral performances.

 

 

Source: Newsonair

Disclaimer: All efforts have been made to represent India accurately and as per India government. However, Universal School of Administration, Bengaluru and its associated people do not own any responsibility for the correctness or authenticity of the same.

Please notify on the email: [email protected] if any inconsistency is found for the factual correctness.