Measuring NY In India

National Accounts Statistics

 History - National Income Committee set up
in 1949; chairmanship of P.C. Mahalanobis
 First official estimates of national income
with base year 1948‑49, published in 1956
 MOSPI; October 1999
 CSO and NSSO are part of the Statistics wing
 In addition – National Statistical Commission
and ISI
 Publication periodicity
 Annual national accounts statistics and
quarterly estimates of GDP (lag of 1 qtr)

 Annual GDP estimates

 Advance estimates (2 months before the
close of the year)
 Quick estimates (with 10 months lag)
 Revised estimates (over next 2-3 years)
 Latest: GDPFC (2009-10)
 GDPFC at constant (2004-05) prices in the
year 2009-10 is estimated at Rs. 44,64,081
crore showing a growth rate of 7.4 per cent
(as against 7.2 % in the Advance Estimates)
over the Quick Estimates of GDP for the year
2008-09
 GDPFC at current prices (2009-10) is
estimated at Rs. 58,68,331 crore, showing a
growth rate of 12.2 % over the Quick
Estimates of GDP for the year 2008-09
 Latest: PCY (2009-10)
 The PC net national income in real
terms (at 2004-05 prices) during 2009-
10 is estimated to attain a level of Rs.
33,588; therefore, the growth rate is
estimated at 5.6 %
 The PCY at current prices during 2009-
10 is estimated to attain a level of Rs.
44,345 showing a rise of 10.5%
Sectoral contribution as a % of GDP
Do you see a structural shift?
Yr/ 1957 1967 1977 1987 1997 2002 2007 2010
Str (P)

Agr 47 42 36 30 27 23 18 14

Inds 14 16 19 21 22 20 21 20

Contr 3 4 5 5 5 6 8 9

Svcs 36 37 40 44 46 51 52 57
 Observation

In India the move has been mainly from

agriculture to services in terms of
share of output, with no substantial
increase in manufacturing, while the
structure of employment has been
stubbornly resistant to change.
 Growth Rates

1950-80 1980-2005
Total 3.5% 5.6%
Per Capita 1.4% 3.6%
 Income levels across the
world
 Low income-
Bangladesh, Kenya, Afghanistan, Nepal,
Cambodia, Myanmar, Zambia
 Low-Middle income-
India, Maldives, Pakistan, Egypt, Philippines,
Ukraine
 Upper-Middle Income-
Brazil, Mexico, Malaysia, South Africa
 High income-
US, France, Japan, Germany, Italy,
Luxembourg, Spain, UK, UAE, Kuwait
Distribution of Income
India faces serious disparity in
income distribution
Regional disparity
Rural-Urban disparity
Gender disparity
Income inequality gives rise to
poverty !
 Poverty is pronounced
deprivation in well-
being
 It includes low incomes
and the inability to
acquire the basic goods
and services necessary
for survival with dignity
 India: Official
estimation since 6th FYP
 Measures of Poverty
Absolute Poverty Relative poverty

Classifies people as Classifies people as

poor who are not able poor if they are below
to meet a certain some relative poverty
minimum level of threshold
income/expenditure.
e.g. on the basis of
Government norms for income comparison
poverty between 2 households,
2400 calories per one of them may be
capita/day (rural areas) considered as poor
2100 per capita/per day
(urban areas)
 Living below poverty line..
Below poverty Rural (%) Urban(%) Combined
line (%)

1973-4 56.4 49.0 54.8

(Rs.49.63) (Rs.56.64)
1983-4 45.6 40.7 44.4
(Rs.89.5) (Rs.115.65)
1993-4 37.2 32.3 35.9
(Rs.205.84) (Rs.281.35)
1999-2000 27.1 23.6 26.1
(Rs.327.56) (Rs.454.11)
2004-5 21.8 21.7 21.8
(Rs.365.3) (Rs.538.6)
 Tendulkar committee recos.
 Urban HHs <=Rs.3000pm; Rural <=Rs.2250pm
 Individual level: Rs.446.68(rural) ; Rs.578.8(urban)
 No longer measurement in terms of calorie intake
 Redefine poverty as deprivation by including access
to facilities like education, health, infrastructure,
clean environment and benefits for women and
children
 According to the new method 37.2% of the total
population, or 81 million families, would be placed
below the poverty line
 The new index will be used in the next round of the
countrywide National Sample Survey
 This may throw up disturbing numbers
 Measuring Income Inequality

 Lorenz Curve; Max Lorenz; 1905

 It plots the proportion of the total income of

the population (y axis) that is cumulatively
earned by the bottom x % of the
population (x axis)
 Gini Coefficient
 Measures inequality of income distribution
 Uses the Lorenz curve; Corrado Gini;1912

 It is the ratio of the area between the line

of equality & Lorenz curve and the area
between the line of equality and the line of
complete inequality
 The Gini coefficient can range from 0 to 1
 Source: HDR 2009
Country Gini Index
India 36.8
US 40.8
China 43.4
Germany 28.3
Brazil 55.0
Namibia 74.3
Japan 24.9
Australia 35.2
 What factors have been
responsible for poverty in
India?
 Home Task
Find out the major
measures taken by the
Government to tackle
poverty in India