Change of Base of National Accounts of Pakistan from 1999-2000 to 2005-06

284 Pages·2013·6.57 MB·English

by  Arif Mahmood

ASIF BAJWA
Chief Statistician
Pakistan Bureau of Statistics
Statistics Division
Government of Pakistan

21 - Statistics House,
Mauve Area, G - 9/1, Islamabad,
Pakistan

Tel: [phone]
Fax: [phone]
E-mail: [email protected] , [email protected] ,
Website: pbs.gov.pk

ARIF MAHMOOD CHEEMA
Member National Accounts
Pakistan Bureau of Statistics
Statistics Division
Government of Pakistan

21 - Statistics House,
Mauve Area, G - 9/1, Islamabad,
Pakistan

Tel: [phone]
Fax: [phone]
E-mail: [email protected], [email protected]
Website: pbs.gov.pk

ISBN 978 - 969 – 9888 – 00 - 7
Foreword

Statistics play an important role in policy formulation and informed decision making. Economic
indicators are highlighted in media more than ever. With the passage of time data sources improve, new fields
emerge, and as a result the frame work needs, revisions. To cope with international standards and improved
versions of the frameworks, frequent revisions are required. In the developed statistical systems five years
period is considered appropriate. In developing systems the need to change the base is more emergent as the
sources of data and methods of estimation are improving along with the capacities of the statistical
organizations. Due to the availability of documented information more sophisticated statistical techniques are
being adopted. Instead of changing the sources and methods fragmentally, the preferred method is to
introduce their changes in a holistic manner so as to enable comparison with the old system.

History of change of base of national accounts of Pakistan is not so rich. It remained a rather
neglected activity. In 1952 the national accounts estimates were prepared from 1949 onwards at current
prices. In 1962-63 the base of 1959-60 was adopted. In 1987 the base of 1980-81 was adopted. Then in 2003,
the base of 1999-2000 was adopted. The rebasing was done with classifications of the 1968 SNA. The need
for the change of base was realized during the 2003 and work started to have 2005-06 as the base year.

The process of the latest updation of national Accounts began with the approval of a development
scheme costing Rs. 283 million in 2005-2006. Work began in earnest with the commissioning of a number of
surveys, census and studies during the period 2006-2010. Emphasis was laid more on census and surveys
rather than on studies. During this period the SNA 2008 also become available and was adopted for use in the
rebasing exercise. This helped in the rectification of errors like double counting, and valuation of omissions.
Conceptual changes like exploration costs, intellectual property products, basic prices valuation, etc. have
been used. Measurement of financial and insurance services through “Financial Intermediation Services
Indirectly Measured (FISIM)” is a structural change now incorporated in the national accounts of Pakistan.
Coverage has been enhanced. Censuses, surveys and studies are the main sources. Secondary data has
been used where primary data was not available. Consultation on different subjects with the national as well
as international experts resulted in the improvement of methodology and its documentation. The result is the
change of base of national accounts from 1999-2000 to 2005-06 conforms to the latest methods and is based
on latest data available. Conceptual references and details of methodology is a subject of special focus.

This work was carried out by the highly dedicated team of National Accounts professionals at the
PBS. This team was very ably supported in capacity enhancement and technical advice by the GIZ and its
consultants during the entire exercise. I must also acknowledge the contribution of the Special Committee of
Experts designated by the Finance Minister to review the sources and methods applied in the exercise.
Advisor to the Prime Minister for Finance encouraged us to expeditiously complete and present the rebasing
exercise. The Governing Council in its fourth meeting held on April 29, 2013 approved the change of base
from 1999-2000 to 2005-06. The Governing Council also set up a Committee of its members to determine the
time frame for the next rebasing exercise most likely to adopt 2014-15 as the base year.

While I acknowledge the hard work put in by the National Accounts team of PBS, led by Mr. Arif
Mahmood Cheema, Member, any short comings and mistakes are my responsibility. I would also like to
request views and comments on this exercise to help PBS in next rebasing.

ASIF BAJWA
Chief Statistician
Pakistan Bureau of Statistics
(April 29, 2013)
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Acknowledgement – Team of National Accounts
Mr. Arif Mahmood Cheema Member (NA) Mr. Habib ur Rehman SA
Mr. Shahid Mahmood Butt DDG (NA) Mr. Umer Daraz SA
Mr. I. D. Feroze Director (NA) Mr. Shaukat Shagheer Raja SA
Mr. Ghulam Mustafa CSO Mr. Muhammad Zubair SA
Mr. Liaqat Ali CSO Mrs. Farah Deeba SA
Miss Shazia Begum CSO Mrs. Sadia Anjum SA
Mr. Muhammad Younas Khattak SO Mr. Sher Ali SA
Mr. Muhammad Afzal Raza SO Mr. Badshah Hayat SA
Mr. Abdul Majeed SO Mr. Shakeel Ahmed Khan SA
Mrs Shahida Faisal SO Mr. Muhammad Pervez SA
Mr. Muhammad Saleem Bhatti SO Mr. Mohammad Rafique SA
Mr. Muhammad Rafiq SO Mr. Ahmed Masood ul Hasan SA
Mr. Tahir-ul-Islam SO Mr. Arshad Mahmood SA
Mr. Waqar Aslam SO Mrs. Abida Parveen SA
Mr. Mazhar Hussain SO Mrs. Seema Nasim SA
Mrs. Hina Nousheen SO
Mrs. Naeema Yousaf SO
Miss Tayyaba Javeed SO
Mr. Abdullah Khan SO
Mr. Atif Hassan SO

Acknowledgement – Team of GIZ
Mr. Bernd Struck Principal Advisor
Mr. Michael Wild Principal Advisor
Syed Raisul Hasan Rizvi Senior Expert – National Accounts/Statistics
Mrs. Suad Rizwan Technical Expert (IT)

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Preface

With the documented data the reliability of the estimates improves and the estimation methodologies
become refined. But it is a slow process. The national accounts had been estimated on current prices until the
base was set as 1959-60 which was adopted in 1962-63. The first change of base took place in 1987 when the
year 1980-81 was adopted as base year. The next change of base was adopted in 2003 setting the base as
1999-2000. The need was realized at the same time for the change of base. Year 2005-06 was declared as
the new base year. Surveys were planned to evaluate major sectors / industries, studies were preferred to fill
in the gaps and capture new activities.

The exercise took long time. Since SNA 2008 and as a resultant ISIC Revision 4 were available, the
work was planned to utilize these standards in the change of base. Accordingly PSIC 2010 was released
which is parallel to ISIC rev. 4, already collected data were classified utilizing PSIC 2010 and it has been
bridged where needed. COICOP, CPC version 2, COFOG have been introduced in the system, new price base
and Manufacturing base have been adopted. FISIM has been incorporated for measuring the contribution of
finance and insurance. Double deflation and basic prices concepts have been actualized. And this all has got
the sustainability due to the adoption of the base 2005-06.

A lot of dedicated efforts are behind the achievement. Thinking process inherited in the System of
National Accounts was a driving force for the conceptual issues. At this point of time the services of an
experienced expert of national accounts who had a long working in a developed statistical system, Mr. Bernd
Struck became available. His long stay with PBS and direct observation of the local system combined with a
vision of the PBS is the basis of this leap ahead. It has enriched the document in many ways.

He employed latest techniques for capacity building to update the national accountants of PBS. E-
learning courses on national accounts were conducted. On-the-job trainings, in-country courses, by the
national experts as well as international experts, out-of-country special courses, visits to developed systems
were employed. All techniques were complementing each other. The corner stone of the policy was the
sustainable achievements. The contribution of Mr. Struck for the national accounts of PBS is noteworthy. He
continued reviewing the draft even after his departure from Pakistan since September 2012. Let me thank him
for putting his special skills in the service of national accounts of Pakistan. The support of Dr. Michael Wild
after Mr. Struck was an instrumental for the completion of the document.

Senior local experienced national accountants like Syed Raisul Hasan Rizvi and Mr. Shahid Mehmood
Butt (DDG) have contributed heavily. Discussions with the sector specialists of the national accounts of PBS
have improved the quality of the narrative and it has clarified the conversion of the SNA in to PSNA. Mr. Rais
served as an institutional memory. He served in NA for more than 30 years. After retirement his support and
guidance remained available up to the completion of the change of base.

Un-wavering support of Mr. Asif Bajwa during his tenure as secretary statistics division and presently
as a Chief Statistician of PBS has been a source of strength. His encouragement and interest in the
completion of change of base remained a source of enthusiasm and inspiration for the officers and officials of
national accounts. The firm support of Mr. Sohail Ahmad, Secretary Statistics Division for the continuation of
the exercise was the guarantee for success. He shouldered the responsibility at a very critical time.

The whole exercise is a team work. It was not possible without the inspired team. They rose to the
expectation and met all standards. My heartily congratulations to all members of the team, specially to the
senior members like Mr. Majeed, Mr. Liaqat, Mr. Younis Khattak, Mr. Afzal Raza, Ms. Shahida Faisal, Ms.
Shazia, Mr. Waqar. The contribution of junior team members like Mr. Tahir Khattak, Mr. Mazhar, Mr. Athar, Mr.
Adnan Shams, Ms. Hina, Ms. Naeema, Ms. Tayyaba, Mr. Abdulla, is significant. They are the future of NA of
Pakistan. I should not forget the contribution of our members who retired during the exercise like Mr. Akram
Awan and Fida. Their expertise in their fields was an asset of PBS. The help and support extended by the
statistical assistants and other supporting staff is appreciable. Many many thanks to them. This was not
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possible without the untiring efforts of the team. My special thanks to Mrs. Suad Rizwan of GIZ. She
streamlined the calculations of GGS and this document as well.

The document will serve a vehicle for mounting the future developments. It will serve a baseline for
the next change of base exercises. It is documentation as well as reference for the enhancement of sources
and methods. Quarterly national accounts, Institutional sectors accounts and supply and use tables and hence
input-output tables are the next targets. The identification of the gaps through comparison and analysis of
household expenditure surveys and the estimation of household consumption expenditure through residual
approach is a subject of continuation exploration.

It was devotion, sincerity, purposefulness, commitment and vision from top to toe that the dream
comes true. Thanks God. The success is due to the team, I owe its lacking.

ARIF CHEEMA
Member, National Accounts,
Pakistan Bureau of Statistics
April 29, 2013
vi
Summary table of contents
Foreword iii
Acknowledgement - Team of national accounts iv
Preface v
Summary table of contents vii
Table of contents ix
List of tables xvii
List of annexure xxiii
List of figures and diagrams xxiv
List of abbreviations and acronyms xxv
CHAPTER 1: Overview 1
CHAPTER 2: Agriculture, Forestry and Fishing 19
A. Agriculture 20
AI. Crops 20
AII. Livestock 29
B Forestry 36
C Fishing 38
CHAPTER 3: Industry 67
A. Mining & Quarrying 67
B. Manufacturing 75
BI. Large-Scale Manufacturing 75
BII. Small-Scale Manufacturing 87
BIII. Slaughtering 91
C. Electricity generation and distribution, and Gas distribution 96
CI. Electricity generation and distribution 96
CII. Gas distribution 101
D. Construction 106
CHAPTER 4: Services 109
A. Wholesale & Retail Trade 112
B. Transport, Storage & Communication 125
C. Finance and Insurance 131
CI. Financial Corporations 131
CII. Insurance including Pension Funds 177
D. Housing Services (including Ownership of Dwellings) 195
E. General Government Sector 200
F. Other Private Services 212
CHAPTER 5: Expenditure on GDP 221
A. Individual consumption expenditures of households and NPISH 222
B. Collective consumption expenditure 224
C. Gross fixed capital formation 226
D. Changes in inventories and acquisition less disposal of valuables 250
E. Exports and imports of goods and services 252
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