MEASURING SERVICES IN NATIONAL ACCOUNTS NATIONAL
Description: MEASURING SERVICES IN NATIONAL ACCOUNTS NATIONAL ACCOUNTS DIVISION CSO NEW DELHI, INDIA MEASURING GVA OF SERVICES Services are the fastest growing sector. Estimation of output and prices entails various theoretical and practical
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slide1. MEASURING SERVICES IN NATIONAL ACCOUNTS NATIONAL ACCOUNTS DIVISION
CSO
NEW DELHI, INDIA<br>
slide2. MEASURING GVA OF SERVICES Services are the fastest growing sector.
Estimation of output and prices entails various theoretical and practical difficulties
Economic characteristics of services - intangibility and heterogeneity.
Challenges in measuring volumes or output and value added at constant prices<br>
slide3. COVERAGE<br>
slide4. VALUE ADDED SHARES * Quasi corporations are unincorporated enterprises maintaining accounts and source of data is the NSS enterprises survey.<br>
slide5. VALUE ADDED SHARES<br>
slide6. Sources of data<br>
slide7. ESTIMATING GVA ( Non –Financial Services) Market producers : output in nominal terms is measured from the books of accounts broadly as sum of sales and changes in inventories.
Non-market producers : output is measured at nominal prices on the basis of input cost approach, as sum of inputs, compensation of employees and consumption of fixed capital(CFC)
CFC is compiled following the procedure of Perpetual Inventory method.<br>
slide8. Household sector Bench Mark Year estimate : Estimated Labour Input and the value added per worker (VAPW) in the activity.
For subsequent years, the GVA is estimated by extrapolation using appropriate indicators relevant to the economic activity
Effective LI method used for compiling estimates in some sectors to address the issue of differential labour productivity by assigning weights to different categories of workers engaged in an economic activity based on their productivity.
Nested Cobb-Douglas function has been used for computing the weights of different categories of workers.<br>
slide9. INDICATORS USED<br>
slide10. INDICATORS USED<br>
slide11. INDICATORS USED<br>
slide12. Classification of financial corporations Financial corporations sector are divided into nine subsectors according to its activity in the market and the liquidity of its liabilities
Central Bank
Deposit taking corporations except the central bank
Money Market Fund
Non-Money market investment fund
Other financial intermediaries except insurance corporations and pension funds
Financial auxiliaries
Captive financial institutions and money lenders
Insurance corporations
Pension Funds<br>
slide13. ESTIMATES AT CURRENT PRICES Central Bank (RBI) - Cost method on the entire operations of the RBI.
Deposit taking corporations except the central bank- All nationalized banks, regional rural banks, other scheduled commercial banks including private and foreign banks, Cooperative credit societies etc.( financial intermediaries )<br>
slide14. Financial intermediaries Reference Rate (RR) approach
Output = FISIM (financial intermediation services indirectly measured) + AR (actual receipts)
FISIM = (LR-RR)* average stock of loans + (RR-DR) * average stock of deposits.
RR = harmonic mean of lending rate(LR) and deposit rate (DR) for the banking sector
Intermediate Consumption (IC) = Management expenses + commission to agents + bank charges + repair and maintenance + other misc. expenses<br>
slide15. Financial intermediaries FISIM under RR method does not include:
Interest receipts on investments and debt securities
Interest Paid on borrowing and debt securities
Net Profit on Sale of Investments
These are considered as property income and are included in savings
AR comprise of misc. income, brokerage, commission income, etc.<br>
slide16. ESTIMATES AT CURRENT PRICES Money Market Funds
Non MMF investment Funds
Output comprises of purchase and redemption fee, exchange fees, account fees, annual fees such as management fees distribution and other fees and performance fees.<br>
slide17. Other financial intermediaries except insurance corporations and pension funds<br>
slide18. Other financial intermediaries except insurance corporations and pension funds deposit taking enterprises (output=FISIM+explicit fees)
FISIM = FISIM on loans + FISIM on deposits
non-deposit taking enterprises (output=FISIM+explicit fees)
FISIM = FISIM on loans
In the case of others Output is the value of the explicit fees.<br>
slide19. Financial auxiliaries<br>
slide20. Captive financial institutions and money lenders money lenders
output is FISIM : (LR- RR)/100*loan
Estimate is derived utilising the information on ratio between loans from banks and moneylenders from the All India Debt and Investment Survey and the loan information from the Reserve Bank of India.
Difficult to classify “holding companies” seperately from the MCA21 database .<br>
slide21. Output:
Premium less reinsurance
Premium supplements : interest received + dividend received + net profit on sale of investments
Less Adjusted claims : Claims and surrenders, interest paid, net accruing liability (or change in actuarial reserves), bonus to policyholders, change in equalisation provision
Miscellaneous receipts : Business receipts + redemption receipts
Intermediate Consumption (IC) :
Management expenses, commission to agents, bank charges, repair and maintenance, other misc. expenses
GVA = Output - IC
Net accruing liability – applicable only for life insurance
Change in equalisation provision – applicable for non-life insurance 21 Insurance corporations<br>
slide22. PENSION FUNDS Output is estimated as the sum of costs (i.e. intermediate consumption, compensation of employees, capital costs and other taxes less subsidies on production)<br>
slide23. Indicators used are
Total credits and total deposits of commercial banks
Total deposits and number of members – cooperative banks
Value of life fund and value of sum assured
Gross premium less claims
Indicators in nominal terms are deflated using
GDP deflator of non-financial sector
Consumer Price Index
Base year estimates is extrapolated using growth in indicators 23 ESTIMATES AT CONSTANT PRICES<br>
slide24. Challenges and Way forward In the case of financial corporations , emerging areas need to be covered
Payments bank
Credit card operations
Peer-to-peer lending etc.
Data availability for a few specific types of financial enterprises, like holding corporations, brass plate units, pawnshops engaged mainly in lending, etc.need to be improved
Database on outputs and outcomes alongwith quality aspects, of different non market services like health services required for measuring real output<br>
slide25. Challenges and Way forward Absence of suitable service price indices
Dedicated survey on services sector using a list frame that is based on list of Companies, sixth economic census and Business Registers, has been conducted as a prelude to Annual Survey of Services. This would provide a regular flow of data pertaining to the organised segment of the services sector.
Future plans of annual unincorporated surveys, surveys of services sector and Periodic Labour force surveys would provide real time data on services sector and improve the quality of estimates<br>
slide26. THANKS<br>
CSO
NEW DELHI, INDIA<br>
slide2. MEASURING GVA OF SERVICES Services are the fastest growing sector.
Estimation of output and prices entails various theoretical and practical difficulties
Economic characteristics of services - intangibility and heterogeneity.
Challenges in measuring volumes or output and value added at constant prices<br>
slide3. COVERAGE<br>
slide4. VALUE ADDED SHARES * Quasi corporations are unincorporated enterprises maintaining accounts and source of data is the NSS enterprises survey.<br>
slide5. VALUE ADDED SHARES<br>
slide6. Sources of data<br>
slide7. ESTIMATING GVA ( Non –Financial Services) Market producers : output in nominal terms is measured from the books of accounts broadly as sum of sales and changes in inventories.
Non-market producers : output is measured at nominal prices on the basis of input cost approach, as sum of inputs, compensation of employees and consumption of fixed capital(CFC)
CFC is compiled following the procedure of Perpetual Inventory method.<br>
slide8. Household sector Bench Mark Year estimate : Estimated Labour Input and the value added per worker (VAPW) in the activity.
For subsequent years, the GVA is estimated by extrapolation using appropriate indicators relevant to the economic activity
Effective LI method used for compiling estimates in some sectors to address the issue of differential labour productivity by assigning weights to different categories of workers engaged in an economic activity based on their productivity.
Nested Cobb-Douglas function has been used for computing the weights of different categories of workers.<br>
slide9. INDICATORS USED<br>
slide10. INDICATORS USED<br>
slide11. INDICATORS USED<br>
slide12. Classification of financial corporations Financial corporations sector are divided into nine subsectors according to its activity in the market and the liquidity of its liabilities
Central Bank
Deposit taking corporations except the central bank
Money Market Fund
Non-Money market investment fund
Other financial intermediaries except insurance corporations and pension funds
Financial auxiliaries
Captive financial institutions and money lenders
Insurance corporations
Pension Funds<br>
slide13. ESTIMATES AT CURRENT PRICES Central Bank (RBI) - Cost method on the entire operations of the RBI.
Deposit taking corporations except the central bank- All nationalized banks, regional rural banks, other scheduled commercial banks including private and foreign banks, Cooperative credit societies etc.( financial intermediaries )<br>
slide14. Financial intermediaries Reference Rate (RR) approach
Output = FISIM (financial intermediation services indirectly measured) + AR (actual receipts)
FISIM = (LR-RR)* average stock of loans + (RR-DR) * average stock of deposits.
RR = harmonic mean of lending rate(LR) and deposit rate (DR) for the banking sector
Intermediate Consumption (IC) = Management expenses + commission to agents + bank charges + repair and maintenance + other misc. expenses<br>
slide15. Financial intermediaries FISIM under RR method does not include:
Interest receipts on investments and debt securities
Interest Paid on borrowing and debt securities
Net Profit on Sale of Investments
These are considered as property income and are included in savings
AR comprise of misc. income, brokerage, commission income, etc.<br>
slide16. ESTIMATES AT CURRENT PRICES Money Market Funds
Non MMF investment Funds
Output comprises of purchase and redemption fee, exchange fees, account fees, annual fees such as management fees distribution and other fees and performance fees.<br>
slide17. Other financial intermediaries except insurance corporations and pension funds<br>
slide18. Other financial intermediaries except insurance corporations and pension funds deposit taking enterprises (output=FISIM+explicit fees)
FISIM = FISIM on loans + FISIM on deposits
non-deposit taking enterprises (output=FISIM+explicit fees)
FISIM = FISIM on loans
In the case of others Output is the value of the explicit fees.<br>
slide19. Financial auxiliaries<br>
slide20. Captive financial institutions and money lenders money lenders
output is FISIM : (LR- RR)/100*loan
Estimate is derived utilising the information on ratio between loans from banks and moneylenders from the All India Debt and Investment Survey and the loan information from the Reserve Bank of India.
Difficult to classify “holding companies” seperately from the MCA21 database .<br>
slide21. Output:
Premium less reinsurance
Premium supplements : interest received + dividend received + net profit on sale of investments
Less Adjusted claims : Claims and surrenders, interest paid, net accruing liability (or change in actuarial reserves), bonus to policyholders, change in equalisation provision
Miscellaneous receipts : Business receipts + redemption receipts
Intermediate Consumption (IC) :
Management expenses, commission to agents, bank charges, repair and maintenance, other misc. expenses
GVA = Output - IC
Net accruing liability – applicable only for life insurance
Change in equalisation provision – applicable for non-life insurance 21 Insurance corporations<br>
slide22. PENSION FUNDS Output is estimated as the sum of costs (i.e. intermediate consumption, compensation of employees, capital costs and other taxes less subsidies on production)<br>
slide23. Indicators used are
Total credits and total deposits of commercial banks
Total deposits and number of members – cooperative banks
Value of life fund and value of sum assured
Gross premium less claims
Indicators in nominal terms are deflated using
GDP deflator of non-financial sector
Consumer Price Index
Base year estimates is extrapolated using growth in indicators 23 ESTIMATES AT CONSTANT PRICES<br>
slide24. Challenges and Way forward In the case of financial corporations , emerging areas need to be covered
Payments bank
Credit card operations
Peer-to-peer lending etc.
Data availability for a few specific types of financial enterprises, like holding corporations, brass plate units, pawnshops engaged mainly in lending, etc.need to be improved
Database on outputs and outcomes alongwith quality aspects, of different non market services like health services required for measuring real output<br>
slide25. Challenges and Way forward Absence of suitable service price indices
Dedicated survey on services sector using a list frame that is based on list of Companies, sixth economic census and Business Registers, has been conducted as a prelude to Annual Survey of Services. This would provide a regular flow of data pertaining to the organised segment of the services sector.
Future plans of annual unincorporated surveys, surveys of services sector and Periodic Labour force surveys would provide real time data on services sector and improve the quality of estimates<br>
slide26. THANKS<br>