Annexure - Directorate of Economics and Statistics

1.1 Introduction
1. INTRODUCTION
The development of official estimates of national income and related aggregates to meet the requirements of
planning and policy purposes began after Independence. Recognising the need for providing estimates of State
income on a regular basis, a section for the computation/ compilation of State Income estimates was created in the
head quarters of Directorate of Economics and statistics, Government of Karnataka in 1960. At the State level, the
State Income estimates were computed for the first time in 1960-61 for the years 1956-57 onwards with 1956-57
as base year, for comparison at constant prices. Further the base year was shifted as and when the Central Statistical
Office, Government of India shifted the base year for National Income estimates. At the State level, the base year
was shifted from 1956-57 to 1960-61 in the year 1967, to 1970-71 in the year 1977, to 1980-81 in the year 1989,
to 1993-94 in the year 1999, to 1999-00 in 2006 and to 2004-05 in the year 2010.
The reason for periodically changing the base year of the state accounts is to take into account the structural
changes which have taken place in the economy and to depict a true picture of the economy through macro aggregates
like Gross State Domestic Product (GSDP) and Capital Formation. The estimates at the prevailing prices of the
current year are termed as “at current prices”, while those prepared at base year prices are termed as “at constant
prices”. The comparison of the estimates at constant prices, means the measure of real growth “in real terms”, over
the years.
The present chapter focuses on reasons for choosing 2004-05 as the base year, Use of results of recent
surveys, censuses and type studies, improvements in coverage and procedures of compilation, Implementation of
1993 and 2008 System of National Accounts (SNA), Estimation of workforce for use in New Series, Estimates of
value added per worker (VAPW) and Consultation with Expert Bodies forms the content of this chapter.
Chapter 2 spells out the guiding principles behind the changes made in the compilation of state accounts in the
New Series, including the details of changes made at industry / item level in the industry-wise estimates of Gross
State Domestic Product (GSDP) and expenditure aggregates of GSDP.
Chapter 3 focuses on methodologies for estimation of District Income.
Chapter 4 comprises of methodologies for estimation of State Domestic Product.
1.2 Choice of 2004-05 as the Base Year and preparation of estimates
In the past, National Accounts Statistics / State Accounts Statistics were revised decennially changing the base
to a year, ending with 1. It was primarily because in the base year estimates of national accounts aggregates, the
information on work force plays an important role and work force estimates were obtained from the Population
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