Domestic product at current and constant (2004-05) prices in India: issues in estimation of communication sector

This paper examines the estimation procedure of domestic product for communication sector in India at constant prices. It is observed that the methods used for estimating domestic product at constant prices suffer from serious flaws with respect to communication sector. When corrected by using a simplified method, it is found that the growth in real terms in communication sectors during 2004-12 is much lower than the reported figures. The average annual real growth in communication sector works out to be almost zero instead of about 23 per cent as reported in National Accounts Statistics during 2004-12. As a result, the overall growth during this period gets moderated to 7.97 per cent from the reported figure of 8.45. Thus, the opinion that communication was major driver of growth in India seems to be exaggerated. In addition the observed inconsistency calls for a need of statistical audit to fine tune the statistical system and make it more responsive to dynamics of economic developments