KOCHI: The overhaul in the way the Gross State Domestic Product (GSDP) is calculated has helped Kerala record a higher growth of 8.10 per cent in 2015-16, despite the slowdown in agri and tourism sectors.
As per the data available with ‘Express’ from the Directorate of Economics & Statistics (DE&S), the agri sector reported a negative growth of 2.95 per cent in 2015-16, worse than the previous year (-1.10 per cent). Crops sector as a whole showed a negative growth of 6.80 per cent, down from -3.86 per cent in 2014-15.
A senior officer at the Directorate said demonetisation and the overall slowdown would affect the growth in the current financial year ending March 31, 2017. “For 2016-17, our initial estimate is that Kerala’s GSDP will slow down to 7.8 per cent from 8.10 per cent in 2015-16,” the official said.
The DE&S started to calculate the Kerala GSDP by gross value-added (GVA) at basic prices, replacing the practice of measuring it by GSDP at factor cost after the Central Statistics Office which started to measure the country’s GDP in the new method from 2015. The new measurement has replaced the base year from 2004-05 to the new base year of 2011-12.
The new measurement completely changed the economic growth figures of Kerala economy from 2013-14. For instance, under the earlier method, Kerala’s economy grew by 6.9 per cent in 2013-14, but as per the new calculation, the growth dipped to 3.9 per cent in the period from the previous year’s 6.49 per cent.
V K Vijayakumar, investment strategist, Geojit, said the higher growth in 2015-16 was due to the change in base year. “Services sector accounts for 65 per cent or more of Kerala’s economy, while the share of agri sector is shrinking. The share of communication/telecom sector should also be growing, given the large number of migrants working in the state,” he said.
Not surprisingly, the communication sector grew by 13.47 per cent in 2015-16, up from 12.97 per cent the previous year. Hotels and restaurants sector also saw slowdown in 2015-16, possibly due to the problems faced by the tourism sector.
The growth in hotels and restaurants slipped to 3.99 per cent in 2015-16 from 4.01 per cent the previous year.
“I reckon our growth will improve in coming years as the GST and better tax compliance will help the state generate higher revenues. The big question remains over the slowdown in remittances from the Gulf, which are not reflected in the GSDP data,” said Vijayakumar.