Contents
- Gross Value Added and the Relevance to GDP
- Key terms being used in Coronavirus outbreak
GROSS VALUE ADDED AND THE RELEVANCE TO GDP
Focus: GS-III Indian Economy, Prelims
Why in news?
- The National Statistical Office (NSO) released the provisional estimates of national income for the financial year 2019-20 in which the real GDP was estimated to have expanded by 4.2% in the full fiscal year – slowest pace of growth in 11 years.
- The release also detailed the estimates of the Gross Value Added, or GVA, at basic prices for the four quarters of 2019 as well as the comparable quarterly data for the two preceding years.
- The GVA numbers for the first three quarters revealed significant revisions from the previously released numbers.
What is Gross Value Added (GVA)?
- As per the United Nations System of National Accounts (SNA) – Gross Value Added (GVA) is defined as the value of output minus the value of intermediate consumption;
- and GVA is a measure of the contribution to GDP made by an individual producer, industry or sector.
- In simple terms, GVA gives the rupee value of goods and services produced in the economy after deducting the cost of inputs and raw materials used.
- GVA can be described as the main entry on the income side of the nation’s accounting balance sheet, and from an economics perspective represents the supply side.
How does India Measure GVA?
- India had been measuring GVA earlier using ‘factor cost’.
- In the new series, in which the base year was shifted to 2011-12 from the earlier 2004-05, GVA at BASIC PRICES became the primary measure of output across the economy’s various sectors and when added to net taxes on products amounts to the GDP.
Categories of NSO’s GVA Data:
When it comes to GVA data provided by NSO- the sectoral classification provides data on eight broad categories:
- Agriculture, Forestry and Fishing
- Mining and Quarrying
- Manufacturing
- Electricity, Gas, Water Supply and other Utility Services
- Construction
- Trade, Hotels, Transport, Communication and Services related to Broadcasting
- Financial, Real Estate and Professional Services
- Public Administration, Defence and other Services.
Why are the latest GVA numbers attracting attention?
- The May 2020 NSO estimates saw significant downward revisions in the GVA data pertaining to the first three quarters for five of the eight sectors, dragging down the Q1, Q2 and Q3 GVA growth rates.
- The revisions, combined with a lacklustre performance in the fourth quarter, including a sharp weakening in momentum at two of the largest services sectors ultimately lowered the overall annual GVA growth estimate for 2019-20 by as much as 1 percentage point to 3.9%, from the 4.9% forecast in February.
- Agriculture’s growth for the first three quarters has been marginally increased while Public Administration too as a category has had its numbers boosted for the second and third quarters.
How relevant is the GVA data given that headline growth always refers to GDP?
The GVA data is crucial to understand how the various sectors of the real economy are performing.
The output or domestic product is essentially a measure of GVA combined with net taxes.
What are the drawbacks in using GVA to measure economic growth?
The accuracy of GVA as a measure of overall national output is heavily dependent on the sourcing of data and the fidelity of the various data sources in capturing the huge number of activities that constitute a nation’s economic life.
-Source: The Hindu
KEY TERMS BEING USED IN CORONAVIRUS OUTBREAK
Focus: GS-III Science and Technology, Prelims
COVID-19
A term coined by the World Health Organization (WHO) to denote the disease that has led to a pandemic.
CO stands for corona, VI for virus, and D for disease, while the numerals – 19 refer to the year in which the first case was detected.
WHO claimed it had consciously avoided naming the disease after the place of origin, to avoid stigmatising that country/area.
SARS-CoV-2
The International Committee on Taxonomy of Viruses (ICTV) announced “severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)” as the name of the new virus.
Epidemic
When the incidence of a disease rises above the expected level in a particular community or geographic area, it is called an epidemic.
Pandemic
When the epidemic spreads over several countries or continents, it is termed a pandemic.
R0
R0 — R-Naught is the basic reproduction number. This is the number of new infections caused by one infected individual in an entirely susceptible population.
If R0 is 2, then one individual will infect two others. As of end May, India’s R0 value was in the range of 1.22.
Co-morbidities
Several health conditions including uncontrolled diabetes and hypertension, cancer, morbid obesity, lung diseases, compromised immune systems put patients at greater risk for contracting the infection, and also have poor clinical outcomes.
Transmission
The method by which the disease spreads. In COVID-19 it is through respiratory droplets, expelled while talking, laughing, coughing and sneezing.
Community transmission
When you can no longer tell how someone contracted the disease, or who the source of infection was.
Contact Tracing
Identifying and monitoring people who may have come into contact with an infectious person.
Super spreader
Some individuals seem to have the capacity to cause more infections in a disproportionately large number of people, than others.
Positivity rate
The percentage of people who test positive among all those who are tested.
If positivity rate is high, it is possible that only high-risk groups are being tested.
A low positivity rate can also indicate that not enough testing is being done.
Infection fatality rate
It is the number of deaths occurring in all infected people in a particular population.
Case fatality rate
This is the number of deaths occurring among confirmed cases of COVID-19.
Severe Acute Respiratory Infection (SARI)
A respiratory disease also caused by a coronavirus, and spread through the same transmission method, i.e. respiratory droplets.
Cytokine storm
An immune reaction triggered by the body to fight an infection is known as a cytokine storm when it turns severe.
The body releases too many cytokines, proteins that are involved in immunomodulation, into the blood too quickly.
While normally they regulate immune responses, in this case they cause harm and can even cause death.
RT- PCR (Reverse Transcription-Polymerase Chain Reaction)
It is the primary test to detect COVID-19 infection- that uses swab samples drawn from the nasal/oral cavity to test for the presence of viral RNA (ribonucleic acid).
Antibody tests
These tests check your blood by looking for antibodies, and that just means you have had a past infection of SARS-CoV-2.
Antibodies are proteins that help fight off infections, and are specific to every disease, granting immunity against getting that particular disease again.
Convalescent plasma therapy
It is method of using neutralising antibodies from the blood of people who have recovered from the COVID-19 infection to treat patients with COVID-19.
Hydroxychloroquine (HCQ)
An antimalarial oral drug that is being repurposed for treatment in COVID-19.
It has also been used successfully in the treatment of some auto immune conditions
Flattening the curve
Reducing the number of new COVID-19 cases, day on day.
The idea of flattening the curve is to ensure that the health infrastructure is not overwhelmed by a large number of cases.
Herd immunity
This is also known as community immunity, and constitutes the reduction in risk of infection within a population, often because of previous exposure to the virus or vaccination.
PPE (Personal protective equipment)
PPE is specialised clothing and equipment used as a safeguard against health hazards including exposure to the disease.
-Source: The Hindu
