An Alternate Approach to the Estimation of Saving of the Private Corporate Sector

The saving of the joint stock companies, a major subsector of the Private Corporate Sector, is estimated on the basis of the Paid up Capital (PUC) coverage of the selected companies in the Reserve Bank of India (RBI) Annual studies on company finances in respect of non-government non-financial public and private limited companies. The estimates get vitiated, when the paid up capital coverage is declining over the years. As such, saving of this segment is likely to be overestimated. In this paper, an alternate approach is suggested, linking the outstanding loans in the RBI company finance studies with the data on bank credit by commercial banks to this subsector, available from the RBI annual publications on Basic Statistical Returns (BSR) of Commercial Banks in India(Supply side), which covers all bank branches with full coverage ofborrowal accounts of the companies. As this coverage is relatively high in comparison with that of PUC, the estimates derived therefrom are lower than those published in the National Accounts Statistics (NAS), data in respect of which were hitherto supplied by the RBI. In the revised series of National Accounts (Base 2011–12) brought out by the Central Statistics Office, the estimates of saving of the PCS are compiled using the Data Base of the Ministry of Corporate Affairs (MCA) (named as MCA-21), which is a repository of the on line reporting of data on various items in the annual accounts of the companies. While this is a radical departure from the existing practice, the scope of the sector is widened to cover the Quasi Corporations (QC) also. The object of this paper is not to examine the issues involved in this new methodology, but to suggest an alternate approach to the estimation of saving of the PCS, linking the two sources of RBI data indicated above.