Dear Readers,

The First Revised Estimates of National Income were recently in the news and could be important for your exams.

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, released the First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation for the financial year 2014-15 (with 2011-12 as the base year). In this article, we will look at the key findings of the different sections of the estimates.

Key Findings – National Income

· Nominal GDP (at current prices) for 2014-15 has been estimated at Rs.124.88 lakh crore, which is a 10.8% growth from Rs.112.73 lakh crore in 2013-14.

· Real GDP (at constant 2011-12 prices) is Rs.105.52 lakh crore for 2014-15 and Rs. 98.39 lakh crore for 2013-14, thereby exhibiting a growth of 7.2 % during 2014-15 and 6.6% during 2013-14.

· Nominal Gross Value Added (GVA) at basic prices at the aggregate level saw an increase of 10.5% during 2014-15. In terms of real GVA at constant prices, a growth of 7.1 % has been registered in 2014-15.

· For the year 2014-15, nominal Net National Income (NNI) at current prices was Rs.110.08 lakh crore, showing an increase of 10.8 % from Rs.99.34 lakh in 2013-14.

· Gross National Disposable Income (GNDI) at current prices for 2014-15 is stands at Rs.127.46 lakh crore- a 10.6 % growth from Rs.115.29 lakh crore in 2013-14.

· An estimated Rs.41.17 lakh crore is the Gross Saving during 2014-15, compared to Rs.37.25 lakh crore during 2013-14.

· Though the household sector emerged as the highest contributor to the Gross Saving with a share of 57.8%, it declined from 63.4 % in 2013-14. The drop can be attributed to the decline in household savings in physical assets, which has decreased from Rs.14.61 lakh crore (2013-14) to Rs.13.79 lakh crore (2014-15).

· The share of Non-Financial Corporations in Household Savings has increased from 32.7% (2013-14) to 37.2% (2014-15). The share of Financial Corporations, on the other hand, has seen a marginal increase to 8.2% in 2014-15 from 7.9% in 2013-14.

Key Findings – Capital Formation

· The estimation of Gross Capital Formation (GCF) at current and constant prices is done by two approaches: (i) through flow of funds, derived as Gross Savings plus net capital inflow from abroad; and (ii) by the commodity flow approach, derived by the type of assets. Estimates done by the first method are considered more accurate.

· GCF at current prices is estimated at Rs.42.76 lakh crore for 2014-15, a rise from Rs.39.12 lakh crore during 2013-14.

· The highest contributor to GCF is Non-Financial Corporations, increasing from 45.7% in 2011-12 to 52.0 % in 2014-15. The share of household sector is significant but has seen a decline from 43.4 % in 2011-12 to 33.9 % in 2014-15.

· The share of General Government in GCF has risen to 12.9% in 2014-15 from 9.6% in 2011-12.

· Within the GCF at current prices, the Gross Fixed Capital Formation (GFCF) summed up to Rs.38.44 lakh crore in 2014-15, compared to Rs.35.64 lakh crore in 2013-14.

Key Findings – Consumption Expenditure

· The Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs.71.93 lakh crore in 2014-15, compared to Rs.65.08 lakh crore in 2013-14.

· At constant (2011-12) prices, the PFCE is estimated as Rs.55.2 lakh crore for 2013-14 and Rs.58.64 lakh crore for 2014-15.

· Government Final Consumption Expenditure at current prices is estimated at Rs.13.6 lakh crore for 2014-15, increasing from Rs.11.53 lakh crore during 2013-14. At constant prices, the GFCE estimates for 2013-14 and 2014-14 are Rs.9.77 lakh crore and Rs.11.03 lakh crore respectively.

Key Findings – Per Capita Level

· At current prices, the Per Capita Net National Income is estimated at Rs.86,879 for 2014-15 as against Rs.79,412 for 2013-14.

· The corresponding Per Capita PFCE figures at current prices are Rs. 52,022 in 2013-14 and Rs. 56,772 in 2014-15.

These are the main points to be remembered for the First Revised Estimates of National Income. If you can understand these well, you can attempt questions on it with greater ease.

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