Estimation of savings for the private corporate sector at quarterly intervals

In India the quarterly estimates of GDP are compiled following the production and expenditure approach. However, due to paucity of data sector-wise break-up of Gross Capital Formation and Gross Saving is not available. In this backdrop, the paper attempts to compile quarterly net saving estimate for the private corporate sector using the quarterly financial results of listed non-government non-financial companies (NGNF), an important segment of the private corporate sector. As the annual growth rates in net profits adjusted for non-operating surplus/deficit (NOP) for the NGNF companies tracked the movements in the net savings of the private corporate sector, former was used as an indicator series. Quarterly global estimates were built with the help of indicator based on net profits adjusted for NOP of sample companies. The NAS annual estimate of net savings for the starting year was compiled by apportioning the same in to four quarters on the basis of quarterly distribution pattern observed for the sample data for that year. Estimates for the quarters of subsequent years were derived using the benchmark to indicator method further attuned by proportional Denton method (PD) to address the step problem. The estimates of net savings compiled in above manner were validated by comparing Year on Year movements in the same with relevant macro variable viz., GFCF at current market prices (both series seasonally adjusted)