Annexure - Directorate of Economics and Statistics

4. Methodology for State Income Estimation
The State Domestic Product is defined as the “aggregate of the economic value of all goods and services
produced within the geographical boundaries of the State, counted without duplication, during a specific period of
time”, by convention a financial year.
In the context of planned development of the economy of the state and building Human Development Indices,
the estimates of State Domestic Product (SDP), in common parlance referred to as State Income (SI) and its
derivative Per Capita Income (PCI) play a crucial role. They also serve as sharp tools to assess regional disparities
between the states in the country as well as the overall impact of various developmental programmes carried out by
the Government and provide insight into the strengths and weaknesses in the economy of the State over a period of
time.
The concepts used in the preparation of income estimates at the State level and national level vary for technical
reasons. ‘Income Originating’ concept is used to estimate the SDP at state level, whereas at the national level
‘income accruing’ concept is adopted. Adoption of different concepts is due to the non-availability of accurate/
reliable data on flow of income across the boundaries of the state.
For estimating SDP, the economy of the State is broadly classified into the following three sectors on the pattern
similar to the national income.
Primary Sector
1) Agriculture (including Horticulture) and Livestock.
2) Forestry and Logging
3) Fishing
4) Mining and Quarrying
Secondary Sector
5) Manufacturing
a) Registered
b) Un-Registered
6) Construction
7) Electricity, Gas and Water Supply.
Tertiary Sector
8) Transport, Storage and Communication
a) Railways
b) Transport by other means
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