MEASURING THE TRADE SECTOR IN THE NATIONAL ACCOUNTS OF INDIA
Trade accounts for a significant number of enterprises and contributes a large part to total employment and gross domestic product (GDP) in most developing countries. In India, trade now accounts for 38 percent of all enterprises and contributes about 14 percent to GDP. In real terms, gross value added in trade has been growing at around 8 percent per annum since 1999–2000, indicating that the trade industry is one of the key drivers of GDP growth in India. Since the retail trade industry in India is predominantly run by unincorporated enterprises, measuring the output of this industry and its contribution to the GDP is difficult. The problem is compounded by the fact that at present the periodic enterprises sample surveys carried out in India on the “unorganized” sector do not cover trade. This paper explains how India has approached the problem of measuring the gross value added of the retail trade sector by an indirect method involving what is here described as a “labor input method” and a benchmark-indicator approach using a special trade index. The paper also briefly reviews country practices in measuring the output of retail trade and presents the advantages and disadvantages of India's approach, particularly in the context of achieving GDP exhaustiveness.
No Supplementary Data
No Article Media