As much as 45 per cent of establishments do not maintain regular accounts, making the process of GDP calculation a much difficult task, T.C.A. Anant, Chief Statistician of India, said.
This means that 45 per cent of our economy does not maintain accounts and most constituents likely do not pay taxes, he said, adding that if this fact was excluded, India’s tax-to-GDP ratio would be much better.
Mr. Anant was speaking on the theme ‘Measuring GDP: Truths and Fallacies’ organised by Chennai International Centre, a think-tank to boost art, culture, theatre, music and creative thinking.
Answering a query, he said that the fact that 45 per cent of the economy does not maintain accounts does not mean that the GDP was understated. “The fact is captured in the National Sample Survey”.
However, Mr. Anant admitted that if this 45 per cent maintained accounts, the GDP estimation would have been much simpler and there would not have been need for revisions of estimates.
“Despite the constraints, we have done a reasonable job in calculation as per the National Sample Survey. Of course, there is scope for improvement,” he said.
Mr. Anant also hoped that the Goods and Services Tax would bring more people into the tax net, making data collection more robust.
The government, in January 2015, revised the base year for GDP calculations to 2011-12 and introduced new ways of calculating growth that it said were close to international standards. “GDP only measures economic activity and not the health of economy,” Mr. Anant said, responding to a query on the discrepancies.
