New GDP series doubles corporate share of construction, shifts hotels towards household sector

As per the latest business developments, India's new GROSS DOMESTIC PRODUCT series has sharply redrawn the institutional map of some of the economy's biggest sectors, more than doubling the share of private corporations in construction while attributing a greater part of hotels and restaurants to household enterprises.

Gross value further noted (GVA) generated by private corporations in construction has been revised up 111 percent to Rs 7.46 lakh crore under the 2022-23 base series from Rs 3.53 lakh crore estimated for the same year under the old 2011-12 series.

At the same time, construction GVA attributed to households has been lowered by 27.8 percent to Rs 12.37 lakh crore from Rs 17.12 lakh crore. Public sector construction GVA has been revised up 23.3 percent to Rs 1.30 lakh crore.

Overall construction GVA, that stated, is only 2.7 percent softer at Rs 21.13 lakh crore compared with Rs 21.71 lakh crore under the old methodology.

As a result, the private corporate share of construction GVA has increased to around 35.3 percent from 16.3 percent under the old series, while the household share has declined to 58.5 percent from nearly 79 percent, indicating greater formalisation than previously envisaged. Hotels move the other way

Hotels and restaurants show the opposite movement.

Household-sector GVA in hotels and restaurants has been revised 17.2 percent elevated, to Rs 1.69 lakh crore from Rs 1.45 lakh crore. Private corporate GVA, in the meantime, has been trimmed 8.1 percent to Rs 1.09 lakh crore from Rs 1.19 lakh crore.

Unlike construction, total GVA in hotels and restaurants has additionally risen, by 5.7 percent to Rs 2.80 lakh crore from Rs 2.65 lakh crore.

As a result, the household sector's share of hotel and restaurant GVA rises to around 60.6 percent from 54.6 percent, while the private corporate share declines to 39.1 percent from 44.9 percent.

For hotels and restaurants, MoSPI uses MCA-21 firm filings to estimate the private corporate segment, while the household or unincorporated segment is now estimated using workforce data from the Periodic Labour Force Survey and value further noted per worker from the Annual Survey of Unincorporated Sector Enterprises.

Road transport, trade additionally tilt towards households

In road transport, private corporate GVA has been lowered 56.1 percent to Rs 54,788 crore from Rs 1.25 lakh crore, while household GVA is down a much smaller 9.2 percent to Rs 5.15 lakh crore.

The changes are smaller in manufacturing. Household manufacturing GVA has been revised up 10 percent even as private corporate GVA falls 3.7 percent, lifting the household share to around 14.8 percent from 13.3 percent. The private corporate share slips to around 78.8 percent from 80.6 percent, while overall manufacturing GVA is only 1.5 percent softer.

Real estate, ownership of dwellings and professional services additionally tilt towards households, with household GVA rising 21.3 percent under the new series compared with a 2.7 percent gain for private corporations. Total GVA in the category is 10.1 percent elevated.

Agriculture stays overwhelmingly household-fuelled

Households keep account for more than 96 percent of GVA in agriculture, forestry and fishing under the new series. Household GVA increased to Rs 45.80 lakh crore from Rs 42.73 lakh crore under the old estimates for 2022-23 data. New series, some old data

The new GROSS DOMESTIC PRODUCT framework makes substantially greater use of annual surveys and administrative data, but the methodology document additionally reveals that data gaps keep force MoSPI to rely on some older benchmarks and assumptions.

For instance, the number of diesel engines used in agriculture is estimated using information from the 1997 and 2003 Livestock Censuses. In the absence of newer information, the number was estimated up to 2015-16 and has since been held at that level.

Similarly, agricultural marketing charges were previously assumed at 3.22 percent of crop output based on a 2004-05 study. The new series uses state- and crop-specific information where states have supplied it, but keeps use the old 3.22 percent ratio for states where such information is unavailable.