Advance GDP estimates likely to be off mark: Pronab Sen

Statistics Ministry will be not able to provide reasonably accurate advance estimates of GDP growth for this fiscal on January 6 as it will not have sufficient data for Rabi crop and on the impact of note ban, former Chief Statistician Pronab sen said.

“It will be more of guess work because Central Statistics Office will not have first advance estimate of Rabi crop and Index of Industrial Production (IIP) data for December to know about affect of demonetisation,” Sen said.

Elaborating further he said, “You will have at November IIP data which would not reflect the impact of demonetisation. CSO is supposed to generate data. Advance GDP estimates for the entire fiscal would not have the impact of (disruptive) government policies in third and fourth quarter of 2016-17.” 

He was of the view that this financial year in particular is difficult year for such advance GDP projections due major changes in policies especially when nobody knows its impact in the remaining two quarters.

Statistics Ministry will release advance estimates of Gross Domestic Product (GDP) or economic growth for this fiscal on January 6 as the General Budget is likely to be on February 1 instead of February 28 this year.

“The advance estimates of GDP growth will be released on January 6. It is being released about a month in advance because of government’s initiative to complete the process of passage of General Budget in the Parliament by March 30,” a senior official said.

As per the practice, Central Statistics Organisation (CSO) under the ministry used to release the national accounts data projecting GDP growth for the fiscal on February 7 every year.

The official said that however, the date of presentation of the Budget is not decided as yet, but it is likely to be on February 1, 2016.

The official said that availability of the advance estimates of GDP will be required for Finance Ministry to prepare the General Budget.

As per practice, the CSO used to release advance estimates on February 7. It has been using IIP number till December and also the revised estimates of GDP data for previous fiscal on January 31 every year.

Senior economists including former Planning Commission Deputy Chairman have shown apprehensions that GDP growth could be pulled down by up to two percentage points during the current fiscal after demonetisation on November 8.

In another development, fiscal deficit touched the Rs 4.58 lakh crore mark, or 85.8 per cent of the budget estimate (BE) for the whole financial year, at the end of April-November.

The fiscal situation at the end of November was better this financial year compared to the year-ago period as the deficit then stood at 87 per cent of BE.

Fiscal deficit, the gap between expenditure and revenue for the entire fiscal, has been pegged at Rs 5.33 lakh crore, or 3.5 per cent of GDP, in 2016-17.

As per data released by the Controller General of Accounts, tax revenue came in at Rs 6.21 lakh crore, or 59 per cent of the full-year BE of Rs 10.54 lakh crore.

Total receipts from revenue and non-debt capital of the government during the eight months read Rs 7.96 lakh crore, or 57.8 per cent of BE.

The government’s Plan expenditure during the period came in at Rs 3.64 lakh core, 66.2 per cent of the full-year budget estimate. During the same period last year, it stood at 64.1 per cent.

The non-Plan expenditure in April-November of 2016-17 was Rs 9.22 lakh crore, or 64.6 per cent, of the whole-year estimate.

The total expenditure (Plan and non-Plan) was Rs 12.86 lakh crore, 65 per cent of the government’s full-year estimate of Rs 19.78 lakh crore.

The revenue deficit during April-November stood at Rs 3.48 lakh crore, or 98.4 per cent of BE for 2016-17.