Nagaland GSDP picks up growth to 8.98%

State govt permit to borrow only 3% of GSDP from financial institutions

Our Correspondent
Kohima | September 23

The Directorate of Economics & Statistics (DES), Nagaland informed that as per the advance estimates of Gross State Domestic Products (GSDP) of Nagaland for the year 2021-22, the real growth of the economy have pick up from a negative growth of -2.63% witness in 2020-21 to 8.98% in 2021-22.

“The advance estimates suggest that the growth of the state economy have surpassed the pre-pandemic average growth of 5.38% (i.e. 2011-12 to 2019-20), despite the second wave of the pandemic that plague the economy during the first quarter of the 2021-22,” said DES Director, Neidilhou Angami in the presence of Additional Director, Charles N Kikon and Economics & Statistics Officer, Vikosieto Krose while addressing a press conference on September 21 last.

Mentionably, GSDP, Nagaland 2021-22 (2011-12 Series was released recently, which is based as on July 30, 2022. In absolute number, the real growth of the economy is estimated to increase from Rs 17991.61 crore in 2020-21 (P) to Rs 19607.83 crore in 2021-22 (Advanced Estimates).

Correspondingly, the nominal growth of the economy is estimated to have increase from Rs 30425.11 crore in 2020-21 to Rs 33705.84 crore in 2021-22 (A.E), stated the director in a copy of press note that was made available at the press conference.

Shift in structural change of economy 
The sectoral contribution indicated that the structural change of the economy was slowly shifting towards the tertiary sector of the economy.

The primary sector contribution to Gross State Valued Added (GSVA) overtime has declined from 31.4% in 2011-12 to 26.88% in 2021-22(A.E).

On the other hand, the contribution of the Secondary sector has been hovering around 9% to 12% since 2011-12, reaching a peak of 12.90% in 2017-18. The share of the Tertiary sector which has contributed 56.17% to the GSVA in 2011-12 has steadily increased to 62.77% in 2021-22 (A.E). 

For the purpose of estimation of GSVA, the Economy of the State is divided into three sectors; i.e., Primary, Secondary and Tertiary sector. The Primary sector comprises of activities that deal with the natural resources i.e., Agriculture, Forestry, Mining & Quarrying, Livestock etc. The Secondary sector comprises of activities that transform one goods into other goods i.e. Manufacturing, Construction, Electricity etc and Tertiary sector comprises of Services activities i.e. Trades, Transport, Education, Medical, Financial activities, Public Administration etc.

Primary sector comprises of Crops, Livestock, Fishing & Aquaculture, Forestry & Logging and   Mining & quarrying. As per the advance estimates of GSDP, the growth rate of the Primary sector is estimated to pick up from -1.73% in 2020-21 (P) to 4.37% in 2021-22 (A.E).

Within the Primary sector, the Crops sub-sector is the most robust sector with its contribution to GSVA accounting for 15.41% in 2021-22 followed by Forestry and Logging, Livestock, Mining and quarrying and Fishing and Aquaculture.

The Secondary Sector comprises of all those economic activities which transform one goods into another goods. The sub-sector of secondary sector comprises of Manufacturing, Electricity, Gas, Water Supply & Other utility services and Construction. During 2021-22 (A.E), the growth rate of the Secondary sector is estimated to pick up from a negative of -9.12% in 2020-21 to 9.36 % in 2021-22.
 
Manufacturing sector-core of industrial sector
The contribution from manufacturing sector to GSVA was estimated at 1.62% only in 2021-22.

Under manufacturing, the major production comes from, manufactures of wood and wood products, Manufacture of furniture, Manufacture of non-metallic minerals and the rest are spread over activities like grind mill products, dairy product, weaving apparels, coke and refine petroleum etc.

The sub sector of Electricity, Gas, Water supply and other utility Services is the least affected by the COVID-19 pandemic.

During the pandemic year of 2020-21, whereas all the other sub-sector of the Secondary sector has fallen to a negative growth, the growth rate of the sub sector is estimated to remain at 0.1%.

During 2021-22 (A.E), the sub-sector is estimated to grow at 9.43%.

In the construction sub- sector, the growth in the construction sector is estimated to pick up from     -14.26% in 2020-21 to 8.15% in 2021-22 (A.E).

In terms of construction sector contribution to GSVA, the construction sector share in GSVA was estimated at 6.04% in 2021-22.

 Tertiary sector
The Tertiary Sector comprises of all economic Activities that produces services. It includes Trade, Repairs, Hotels and Restaurants; Transport, Storage and Communication; Banking and Insurance; Real Estates, Ownership of dwelling, Public Administration and Other Services etc. Over the years, the tertiary sector has become the most robust sector contributing 62.77% of GSVA in 2021-22.

During 2021-22, the Tertiary sector was estimated to grow at 8.8%.

One of the critical areas where the impact of the COVID-19 pandemic felt the most was in the Trade & repairs and Hotel & Restaurant sector.

With the lockdown measure prohibiting the operation of economics activities to its full potential, the trading of goods and services which is directly proportional to the operation of the economy had suffered a direct hit during 2020-21.

An indicative of the impact of the lockdown was directly visible from the growth rate of Trade & Repairs and Hotel & Restaurant sector falling to a negative of -7.57% in 2020-21.

With the normalization of the economy, the growth of the sub-sector is estimated to bounce back to a positive growth of 6.80% in 2021-22 (A.E). The sub sector contribution to overall GSVA was estimated at 10.69% in 2021-22.

The subsector of “Transport, Storage, Communication & services related to broadcasting” like any other Services sector has also suffered a severe slide down due to the lockdown measure during 2020-21. Consequently, the sub-sector is estimated to register a negative growth of -16.55% in 2020-21. During 2021-22(A.E), the sub-sector is estimated to grow at 10.22%.
 
Financial services
The Financial services comes under the category of supra regional sector due to their pan India existence.

Consequently, the share of the State is simply the allocation made by National Account Division of the Ministry of Statistics & Programme Implementation, Government of India. In the process of allocation, Ministry rely on the volume of transaction been done in the respective State.

During 2021-22, the financial services are estimated to grow at 9.21% (Annexure-VI) with a share of 3.89% in the overall GSVA.

Real estate and Ownership of dwelling is one of the sub sector which is assumed to be least affected by the COVID-19 pandemic. “This is due to the fact that, the number of dwelling during the year is expected to remain the same,” the press note stated.

During 2020-21, the gross value added of the sub sector is estimated to have a negative growth of -2.7%. This negative growth is solely due to the rate of depreciation suffered by the dwelling units and the rate of declining gross fixed capital formation in the rural areas (rate as per AIDIS).

During 2021-22 (A.E), the contribution of Real estate and ownership of dwelling to total GSVA is estimated at 6.66%.

The estimates of the Public Administration come from the budget document of the Central Government, the State Government and annual report of the Autonomous bodies.

Under Public Administration, the administrative authority is divided into Central Government administration, State Government administration and Autonomous bodies. During 2021-22, as per the Budget Estimates of the Government, the allocation for public administration has increase from Rs 6015.90 crore in 2020-21 to Rs 6764.28 crore.

Adjusting for the inflationary trend in the economy, the overall growth of Public Administration is estimated at 5.19% with a contributory share of 21.49% to GSVA during 2021-22.

In sub-sector of Other Services comprises of Education services, Human health services and other remaining services, during the year 2021-22, the sub-sector of Other Services is estimated to grow at 16.54% (Annexure- In term of contribution to GSVA, 15.67% comes from Other Services.
 
Per capita Income
PCI is an average measure of Income which is supposed to be received by each individual in the     State if the total amount of state income is equally distributed among the total population of the state. Over the period of ten years, the PCI of the State has increase from Rs 53010 in 2011-12 to Rs135701 in 2021-22 (A.E), achieving a compound annual growth rate (CAGR) of 9.8%.
 
Borrowing Limit of state government
Stating that the borrowing limit of the state government is determined by the amount of the GSDP of the state, the DES stated “As per the Finance Commission of India recommendation for budgetary measures, beginning from XIII FC, the state government is permitted to borrow only 3% of the GSDP from the financial Institutions.

Source: https://morungexpress.com/nagaland-gsdp-picks-up-growth-to-898