ESTIMATES OF DISTRICT / TALUK DOMESTIC PRODUCT And its use

1. ESTIMATES OF DISTRICT / TALUK DOMESTIC PRODUCT And its use Directorate of Economics and Statistics Bangalore Karnataka

2. Definition Domestic Product is “aggregate economic value of all the goods and services produced within the geographical boundaries, counted without duplication during a specific period of time”.

3. Importance and Need • Measure the growth in the economy • To build the Human Development Indices • In assessing the relative contribution of different sectors of the economy to the INCOME of the State/District/Taluk and • To Know the nature and extent of Inter-sectoral and inter-regional imbalances in the economy

4. Scope and Coverage SDP / DDP excludes: • Defence personnel and other para-military forces • Govt. offices abroad • Foreign offices of LIC & GIC • Bombay Offshore • Deep sea fishing

5. Concept • INCOME ORIGINATING concept is being adopted in the State • Sum total of the economic value of goods and services produced in the region.

6. Division of Economy into Sectors • Economy of the State is broadly classified into sectors in two ways

7. Methods of Estimation • Income is estimated in three ways

8. Methods of Estimation • Income can be estimated in three ways • PRODUCTION method envisages evaluation of all goods and services produced within the region during a period of time. From value of production, cost of Raw materials, Fuel etc., are to be deducted. • Gross Value Added (GVA) = • Value of Output (GVO) – Value of Input • Agriculture (including horticulture and livestock), Forestry, Fisheries, Mining and Quarrying and Registered Manufacturing

9. Methods of Estimation • In INCOME (Distribution) method, aggregate income is distributed among the four factors of production viz., Land, Labour, Capital & Enterprise. These Factors of production fetches Rent, Wages, Interest & Profit • GVA (Public) = Aggregate of factor incomes (Compensation of Employees (CE) +Interest + Rent + Profits + Dividends) - Consumption of Fixed Capital • GVA (Private) = Workforce X Value Added per Worker • CE = Salaries + Pension + PF + Welfare Expenses • all other sectors

10. Methods of Estimation • EXPENDITURE (Consumption) method is based on the measurement of Income at the stage of disposal. • GVA = Gross Value of Output X (GVA/GVO) ratios • Construction sector • At present all the three methods are followed to compute Gross State Domestic Product.

11. Treatment of Prices • Income obtained by evaluating the current year’s product at current year’s prices is termed as INCOME AT CURRENT PRICES • Income obtained by evaluating the current year’s product at some single base year prices is termed as INCOME AT CONSTANT PRICES • Income at CONSTANT prices reflects the real growth in the economy

12. Financial Intermediation Services Indirectly Measured (FISIM) • Termed as Imputed Bank Charges (IBC) • Is allocated to user industries like Agriculture, Livestock, Mining and Quarrying, Regd. Manufacturing, Un-regd. Manufacturing, Construction, Electricity, Gas & Water Supply, Transport, Storage, Trade, Hotels & Restaurants, Business Services and Other Services • This FISIM is deducted to arrive GSDP

13. Consumption of Fixed Capital (CFC) • Termed as Depreciation • It is that part of Gross Product which is required to replace the fixed capital used up in process of production during the period of account • This flow is based on the concept of the expected economic life of the individual assets • Covers the expected loss in value terms due to obsolescence as well as normal wear and tear

14. Measures relating to Income • By deducting consumption of fixed capital (depreciation) from GSDP we get NET STATE DOMESTICPRODUCT (NSDP) GSDP – Consumption of Fixed Capital (CFC) = NSDP • Per Capita Income is derived by dividing the NSDP at current prices with mid year projected population (as on 1st October)

15. Base Years or Constant Prices • When GDP is measured for an accounting year it is measured at current prices • When its value is compared over years, it is affected by not only the changes in production but also by the changes in prices • Therefore, it is necessary to eliminate the effect of prices, which is done by calculating the value of GDP at given prices of a particular base year • The GDP thus obtained is at constant prices. This gives a measure of the growth of the economy

16. Previous Base Years • Current Series Base Year 2004-05 (2010) • Previous series base years • 1948-49 (1956) 1960-61 (1967) 1970-71 (1978) • 1980-81 (1988) 1993-94 (1999) 1999-2000 (2006) • Choice of base years • Previously population census years • Currently, the NSS employment-unemployment survey years

17. District Domestic Product • First District Income Estimates of the State was prepared in the late seventies at DES for the year 1960-61 at Current Prices. • Subsequently for the years 1970-71, 1975-76 and1980-81 during Eighties At Current Prices • From 1980-81 and onwards district income were prepared both at Current and Constant Prices • In 1999-2000 series the year wise and district wise DDP estimates were prepared and submitted to CSO • Recently, DDP estimates from 2004-05 to 2008-09 in 2004-05 Series were sent to CSO

18. District Domestic Product • On the recommendations of Second Regional Conference on Statistical Matters, the Government of Karnataka and Uttar Pradesh jointly prepared a draft methodology for compiling the estimates of District Domestic Product and submitted the report to CSO in August, 1996. • This draft methodology prepared jointly by the Governments of Karnataka and Uttar Pradesh was circulated among State Directorates of Economics & Statistics for their comments in order to prepare a standard methodology for compiling the DDP estimates and implement the system of District Domestic Product in States. • For State Human Development Reports • 1st released in 1999 and • 2nd released in 2005 • District income estimates were provided by DES

19. Sector wise Contribution of State Income • State’s Per capita Income for 2009-10 – Rs. 51,386 • Highest District Per capita Income – Rs. 1,37,716 (Bangalore Urban) • 2nd Highest District Per capita Income – Rs. 84,153 (Bangalore Rural) • Lowest District Per capita Income – Rs. 24,796 (Bidar) Sector wise Contribution of State Income (%)

20. District Domestic Product (Taluk wise) • An attempt has been made to prepare Taluk level income estimates of the districts of Dakshina Kannada & Tumkur for the year 1993-94 both at Current/Constant (1980-81) Prices. • Subsequently for the purpose of preparation of District Human Development reports of Bijapur, Gulburga and Mysore, taluk income estimates for the years 1999-00 and 2005-06 at Current/Constant (1999-00) Prices were prepared by DES. • Technical guidance has been provided by DES for preparation of taluk income estimates to Udupi district.

21. Estimates of District Domestic Product (taluk wise) • Karnataka is the first state in India to attempt to compute taluk wise domestic product estimates under KSSSP. • At present, we have estimates up to the district level • Taluk level estimates brings light on intra district variation in economic development • This helps to set priority in formulating development plans depending upon its level of backwardness • Helps to calculate Human Development Index

22. Estimates of District Domestic Product (taluk wise) • Estimating the Domestic Product at District level by the ZillaPanchayats (ZPs) is one of the milestones to be achieved under District Domestic Product activity in Karnataka State Strategic Statistical Plan • ZillaPanchayaths (ZP) are the nodal agency responsible to prepare these estimates at District level. Chief Planning Officers (CPO) are nodal officers. • In this regard, two consultants are being provided to the ZPs to work on this along with Consumer Price Index (Urban / Rural) and Contribution of Local Bodies. • State Income unit of the DES is nodal agency in achieving this milestone.

23. Estimates of District Domestic Product (taluk wise) • The first meeting of all CPOs has been held on 15.07.2011

24. Estimates of District Domestic Product (taluk wise) • Meeting with CSO officers on finalisation of the methodology to prepare Taluk income at Bangalore was held on 25.07.2011

25. Estimates of District Domestic Product (taluk wise) • After the meeting with CSO officials, District wise training programmes to all the departments were organised and the importance and formats were explained.

26. Estimates of District Domestic Product (taluk wise) • Two days hands on training to the consultants were organised in 4 phases between 7th September, 2011 and 24th September, 2011. All the consultants were trained about the methodology and formats for computation of Taluk income.

27. Methodology adopted for computation of taluk domestic product • The methodology used is more or less similar to State Estimates. • Below State level, the required basic data are not available for all the sectors. • In respect of Primary Sector (Agriculture, Forestry, Fishing and Mining), the basic data is fairly available. • Wherever the district/ taluk wise basic data are not available, district level estimates will be provided to ZPs by DES. • Then ZPs have to workout taluk level estimates with available workforce provided by Employment and Training Department or suitable/relevant indicators.

28. Present methodology - Agriculture • Production Approach is followed • Total 103 Crops are covered • 1. Cereals (8), 2. Pulses (6), 3. Oil seeds (11), • 4. Sugarcane (3), 5. Fiber (3), 6. Drugs and Narcotics (5), • 7. Condiments & Spices (9), 8.Horticulture Crops (27), • 9.Floriculture Crops (3), 10. Miscellaneous Crops (5) • and 11.By products (20) • Source of the Data : Fully Revised Estimates of Production (DES), Horticulture Department, Sugar Directorate and Boards for production and for prices APMCs, Boards and Prices section of DES

29. Present methodology - Livestock • Total 37 Items of livestock are covered • 1. Milk (1), 2. Meat (9), 3. Meat products (4) • 4. Meat By-products (12) 5. Egg (1), 6. Wool & Hair (4), • 7. Dung (2) 8. Other Products (3) and 9. Increment in Stock • Source of the Data : Production and prices are collected from Livestock Census and Integrated Sample Surveys of Animal Husbandry Department • Value of Output (GVO) = Production X Prices

30. Agriculture and Livestock • GVO = GVO of Agriculture + GVO of Livestock • Value of Inputs are • 1. Seed, 2. Organic Manure, 3. Chemical Fertilisers, • 4. Repairs & Maintenance, 5. Feed of Livestock, • 6. Irrigation Charges, 7. Market Charges, 8. Electricity, • 9. Pesticides and Insecticides and 10. Diesel Oil • GVA = GVO – Value of Input • In addition the GVA from Govt. Irrigation System is added. This will be obtained by analysing the budget documents

31. Methodology adopted

32. Methodology adopted

33. Methodology adopted

34. Methodology adopted

35. Number of Taluks in different Per Capita Income range

36. Statement Showing Maximum and Minimum TDP during 2008-09 current Prices (Rs in Lakh)

37. Statement Showing Maximum and Minimum TDP during 2008-09 current Prices (Rs in Lakh)

38. Statement Showing Maximum and Minimum Percapita Income (PTDP) during 2008-09 current Prices

39. Statement Showing Maximum and Minimum Percapita Income (PTDP) during 2008-09 current Prices

40. Data problems and Suggestions • It has been observed that the data on forestry and mining is not homogeneously available at the taluk level. In many districts the taluk wise production of major & minor forest produces and Production and Value of minerals are not available, if available, the taluk wise total does not tally with the district figures available with the State Income unit. • Zilla Panchayats should make an attempt to have uniform data across taluks.

41. Data problems and Suggestions • The Economic cum Purpose Classification of local body annual accounts will yield many results which are essential in computation of taluk wise domestic product. • It also provides amount which has been spent to create capital asset in the economy which will create more employment opportunities at the local level. • This analysis presents the financial health of the respective local body. • This activity requires more active participation from Zilla Panchayats.

42. Data problems and Suggestions - Usage of Common Business Register • Preparation of Common Business Register (CBR), micro level survey of organised and un-organised sectors under each industry at sub-district level will be undertaken under 13th Finance Commission Grants • Workforce will be derived from CBRs for each industry and Survey results will be useful for compiling Value Added Per Worker. These form taluk level base year estimates. • These estimates will be used for compilation of DDP and SDP estimates • ZPs should prepare a CBR and should update periodically.

43. Data problems and Suggestions • All ZPs should make a presentation of local body accounts in comparison with Taluk Domestic Product at different levels • This will enable to know the areas of imbalances at taluk level

44. THANK YOU