Impact of Housing On GDP Employment FULL REPORT

Impact of Investments in the
Housing Sector on GDP and

Employment in the Indian Economy
Sponsored
Study supported by DFID and Ministry of
Housing and Urban Poverty Alleviation
April 2014
National Council of Applied Economic Research
April, 2014
ACKNOWLEDGEMENT
The Council would like to thank the officials of The Ministry of Housing
and Urban Poverty Alleviation (MoHUPA) for their valuable inputs during the
project review meetings and presentations. The study also benefited
immensely from the insights from comments by invitees from the Ministry of
Finance, Ministry of Labour, Planning Commission and the Central Statistical
Office to these presentations. The Council is particularly grateful to Support to
National Policies for Urban Poverty Reduction (SNPUPR) and DFID for their
support and funding, and to Mr. Kiran Avadhanula for facilitating the study
right from the start.
April, 2014
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PROJECT TEAM
Project Leaders
Poonam Munjal
P.C. Parida (till Dec, 2013)
Project Advisors
D.B. Gupta
Shashanka Bhide
Senior Consultant
Ramesh Kolli
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CONTENTS
Section
No.
1.
2.
3.
4.
5.
Description
Executive Summary
Abbreviations and Acronyms
Introduction
Context of the study
Scope of Work and Study Objectives
Structure of the Report
Input-Output analysis
Introduction
Applications of IO Tables
Limitations of IO Tables
Input-Output Model for Impact Analysis
Static IO Model
Multipliers
Inter-industry Linkage Analysis
Methodology and Approaches to construct Housing Sector IO Table
Sectoral Aggregates
Estimates of Inter-Industry Linkages
Output Multiplier
Employment Multiplier
Income Multiplier
Tax Multiplier
Impact of Housing Demand on Economy
Simulation 1: 10% increase in final demand of residential
construction
Simulation 2: An increase of Rs. 1 lakh crore in final demand of
residential construction
Simulation 3: An increase of Rs. 1 lakh crore in final demand of
other construction
Summary of Findings
Appendices
Appendix 1: Aggregating 130 sectors of IO Table to 21 sectors
Appendix 2: About Input-Output table
Appendix 3: Input-Output table, 2009-10
Appendix 4: Leontief Inverse Matrix
Appendix 5: Extended Leontief Inverse Matrix
Glossary
Page no.
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x
1
1
3
4
5
5
6
7
7
7
9
11
12
16
21
22
26
31
33
37
37
41
45
51
55
57
61
65
73
76
79
Table No.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
4.1
Description of Tables
Aggregation Scheme
Mapping between 21 sectors and NIC codes
Identification of Formal/Informal workers
Sectoral share in key aggregates of IO Table (%)
Sectoral share in employment (%)
Sectors rank on share in respective aggregates
Capital and Labour to Output Ratios
Output Multiplier
Sectors ranking on Output multiplier
Output Multiplier of Residential Construction by sectors
Direct Employment Coefficient
Total (Direct + Indirect) Employment Linkage Coefficient
Type I Employment Multiplier
Total (Direct + Indirect + Induced) Employment Linkage
Coefficient
Type II Employment Multiplier
Type I Income Linkages
Type II Income Linkages
Type I Tax Linkages
Type II Tax Linkages
Type I impact of a 10% increase in Final Demand in residential
construction on the economy
Sectoral increase (Type I) in various parameters following
Simulation 1
Type II impact of a 10% increase in Final Demand in residential
Sectoral increase (Type II) in various parameters following
Simulation 1
Type I impact of an increase of Rs. 1 lakh crore in Final Demand in
residential construction on the economy
Simulation 2
Type II impact of an increase of Rs. 1 lakh crore in Final Demand
in residential construction on the economy
Simulation 2
Type I impact of an increase of Rs. 1 lakh crore in Final Demand in
other construction on the economy
Simulation 3
Type II impact of an increase of Rs. 1 lakh crore in Final Demand
in other construction on the economy
Simulation 3
Salient Features of previous and present studies
April, 2014
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15
16
17
18
19
21
23
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25
27
28
29
30
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EXECUTIVE SUMMARY
The final report of the Study on Impact of investments in the housing sector on GDP
and Employment of Indian Economy is organised in four chapters.
Chapter 1 presents the overview of the housing sector, the objectives of the
present study and the key takeaways
Chapter 2 is devoted to the methodology adopted and the description of the
data sources used for the present study. The IO model, multipliers and
multiplier analysis to carry out policy simulations are also described and
presented in this chapter.
Chapter 3 outlines the policy interventions based on several simulations.
Chapter 4 presents the key findings of the study. This is followed by
annexures.
Overview
The study is based on Input Output Model (IO). An IO model describes the
interdependence between sectors in an economy. In other words, it simply shows the
transactions between the production sectors. The scope of transaction mainly covers
three purposes namely
(i)
(ii)
(iii)
sell or buy inputs

sell or buy goods for final consumption, and
sell or buy goods for future use.
Here, input implies raw material being used for producing another goods or services,
known as intermediate consumption while final goods and goods for future use refer
to final consumption and capital formation (i.e. investment), respectively. An output
may be transacted for all three purposes. In other words, output of sector may be
demanded for intermediate uses by itself and the other sectors.
Direct, indirect and induced effects
If the final demand of a particular product increases, there will be an increase in the
output of that product, as production increases to meet the increase in demand. This
is known as direct effect.
As producers need to increase their output, they would also need more inputs,
therefore, there will also be an increase in demand for inputs from their suppliers.
This process goes on over the entire supply chain. This is known as indirect effect. In
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In response to the direct and indirect effects, the level of household income increases
due to increased employment and a proportion of this increased income are re-spent
on consumption of final goods and services. This is called the induced effect.
Multipliers
When an industry increases its production, there is increased demand for inputs from
industries. In the IO model, this demand is referred to as backward linkage.
Backward linkage is also known as output multiplier. This analyses how a change in
final demand of a sector affects the final demand of the economy.
The ratio of direct and indirect changes to the direct change due to a unit increase in
final demand is termed as type I multiplier.
The ratio of total output changes (direct + indirect + induced) to the direct output
change due to a unit increase in final demand is termed as type II multiplier
Key findings
The construction sector is disaggregated into residential construction, nonresidential construction and other construction sector and the residential
construction sector is treated as housing sector. The key findings of the report are
as follows:
1. The residential construction (housing sector) accounts for
a. 1.24% of the total output of the economy (total construction sector is
11.39%)
b. 1.00% of GDP (total construction sector is 8.2%)
c. 6.86% of the employment (total construction sector is 11.52%)
2. Housing sector is fourth largest employment generating sector.
3. 99.41 per cent of the jobs in housing sector are informal jobs.
4. Its labour to output ratio i.e. number of persons employed to produce a lakh
units of output, is 2.34 and is the highest among all the sectors.
5. The type I output multiplier for housing sector is 2.33 and type II is 5.11 i.e.
the increase of 1 unit in the final demand of housing translates into induced
cumulative revenues of 5.11 units in the economy.
6. For every lakh invested in the housing sector, 2.69 new jobs (2.65 informal
and 0.4 formal) are created in the economy. With induced effect, the number
of jobs created would be 4.06 (3.95 informal and 0.11 formal).
7. For every investment in the housing sector, the household income increases
by Rs. 0.41. With induced effect, this is estimated to be Rs. 0.76.
8. For every unit of housing created the household income increases by 0.41
units. With induced effect, this is estimated to be 0.76 units.
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9. The type I income multiplier for housing sector is 1.54 and type II is 2.84. This
would mean that a unit of increase in the final expenditure in the housing
sector would generate additional income as high as 3 times the income
generated within the housing sector itself.
10. Every additional rupee invested in the housing sector will add Rs. 1.54 to the
GDP and with household expenditure considered, this is going to add Rs. 2.84.
11. For every rupee invested in creation of housing, Rs. 0.12 gets collected as
indirect taxes.
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ABBREVIATIONS AND ACRONYMS

Units used in the Report
1 crore = 10 million
1 lakh = 100 thousand
Abbreviations
CFC
Consumption of Fixed Capital
CIS
Change in stocks/change in inventories
COE/CoE
Compensation of Employees
CSO
Central Statistical Office
EUS
Employment and Unemployment Survey
EXP
Exports of goods and services
FU/FD
Final Use / Final Demand
GCE/GFCE
Government Final Consumption Expenditure
GDP
Gross Domestic Product
GFCF
Gross Fixed Capital Formation
GVA
Gross Value Added
IC
Intermediate consumption
IIHS
Indian Institute for Human Settlements
IMP
Imports of goods and services
I-O Table
Input-Output table
IOTT
Input output transaction table
NAS
National Accounts Statistics
NCAER
NCS
Net capital stock
NIC
National Industrial Classification
NIT
Net Indirect tax
NSSO
National Sample Survey Office
OS/MI
Operating Surplus/Mixed Income
PFCE
Private Final Consumption Expenditure
UA
Urban Agglomeration
Val
Valuables
April, 2014
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1. INTRODUCTION
Context of the study

1.1.
India is currently experiencing rapid growth in population, both urban and
rural. Along with rapid, although somewhat haphazard, urbanization the Indian cities,
both large and medium, are also growing.1 For example in 2011 there were 53 million
plus UAs/cities compared to 35 in 2001. The urban population itself went up from
286.1 million in 2001 to 377.1 million in 2011. Similarly the number of towns in the
corresponding period increased from 5161 to 7935. This has led to steep increase in
demand for housing especially in urban areas. For example during the period 19612001, the total housing stock increased from 13.3 million units to 50.95 million
units.2
1.2.
The local urban governments are unable to meet this increase in demand for
housing, leading to growth of informal/unauthorized housing in the form of slums,
squatter settlements and jhuggi jhompri colonies The vast shortage of housing offers
a great opportunity to stimulate growth in the economy as housing sector is
recognized for its potential for generating income and employment3. In addition,
provision of housing, not only contributes to peoples well being and happiness,
reduced absenteeism, and higher productivity of workers, but also, as recent
researches have shown, in limiting the size of families and lower mortality and
morbidity.
1.3.
According to the Report of the Technical Group for the 11th Five Year Plan
2007-12 on Estimation of Urban Housing Shortage (HUPA), at the beginning of 2007
there was an estimated shortage of 24.71 million housing units, and that the total
housing requirement during 2007-12 was estimated at 26.53 million units. The
housing shortage in the beginning of 12th Five Year Plan (2012) is estimated at 18.78
million units. According to the Report of the Technical Group for the 12th Five Year
Plan, the housing shortage during the period 2012-17 may not increase if the rate of
growth in housing stock continues to be higher than the growth in number of
1
One or two facts about Indias pace of urbanization. One there are several other developing countries, including
China and Brazil, which have experienced higher rate of urbanization; two Indias urbanization compared to its
income growth has not been as rapid as of some other countries at similar stage of development.
2 The housing stock includes pucca, semi pucca and kutcha housing. It is interesting to point out that during the
decade 1991-2001, the growth in housing stock was lower compared to the two previous periods. Also over the
period, there was a decline in the kutcha housing units, perhaps due to various housing schemes of both the
Central government and the state governments.
3
New housing also involves development of raw land including construction of roads, laying of both civic and
physical infrastructure. These in turn have huge employment potential.
April, 2014
households in the 12th Five Year Plan as observed in the last decade. Apart from
housing sector, other critical sectors from the viewpoint of income and employment
are the construction and real estate.
1.4.
As per the National Accounts prepared by the CSO for 2009-10, the
contribution to GDP by the construction sector was 8.2 per cent and that of real
estate, ownership of dwellings and business services was 11.4 per cent; thus
construction and real estate contributing nearly one-fifth of Indias GDP. In terms of
employment during 2009-10, a little over 616 lakh workers were engaged in the
construction sector, and another 7.6 lakh in real estate.4
1.5.
Apart from rapid urbanization, India, in the recent period, has also
undergone through a significant structural transformation from a low skilled
economy to a relatively high skilled services oriented economy. For example the
share of agriculture in Indias GDP which was around 53 per cent in 1950-51 had
declined significantly to around 14 per cent in 2011-12. A consequence of this
structural change is reduced dependence on agriculture and increased migration
from agriculture to high value added sectors like services and industry, clearly in
search of employment.
1.6.
Since these sectors are largely located in urban areas, critical relevance of
urban areas as a trigger in promoting economic growth of the country needs no
further emphasis. This is clear from the fact that top 10 cities in India are estimated
to produce about 15 per cent of the GDP with 8 per cent of the population and just 0.1
per cent of land area (Indian Institute for Human Settlements, IIHS). Also the 53
million plus cities in the country are estimated to produce 32 per cent of the GDP
with 13.3 per cent of the population and just around 0.2 per cent of the land area. The
corresponding percentages for 100 largest cities of the country are 43 per cent GDP,
16 per cent of the population and just 0.24 per cent of land area.
1.7.
As far as the built up area is concerned, there is huge area outside the
purview of urban local bodies, although with far less population density. An
interesting feature of urban growth in the past two decades, especially in the case of
largest 10 cities, has been the pace of growth of built up area which is seen to be
faster than the growth of population in these cities.
1.8.
Another feature of current urban scenario is the relatively higher
concentration of economic output around the major urban centres and urbanized
4
It may be noted that this employment does not mean that all the workers in these sectors had full time
employment.
April, 2014
states. Real estate activity is also found to be concentrated largely in large cities and
metropolitan cities as well as in the more prosperous states too. Because of
employment opportunities in urban areas compared to the rural ones, there is
considerable inflow of migrants to larger cities leading to acute housing shortages.
1.9.
In view of the importance of both housing and construction sectors as critical
sectors from the viewpoint of employment and income, the present study using the
input-output framework has attempted to study the impact of investment in housing
and construction on both employment and income. In doing this we have broadly
attempted to update an earlier study conducted by IIM-A faculty. The following is
broadly the scope of work for the study.
Scope of Work and Study Objectives

1.10. (a) The present study attempts to update and substantiate the findings of the
July 2000 Report on Impact of Investment in the Housing Sector on GDP and
Employment in the India Economy. In addition the study has attempted to:
Study and assess the model used in the July 200 report including the
relevance of its assumptions, and to refine them if required.
Assess, based on the validated model, the inter-industry linkages of
housing investment: A study of direct/indirect linkages with broad
sectors of Indian economy. The study also attempts updating the inputoutput data of Indian economy to reflect the contemporary reality.
Assess impact of housing investment on income generation: A
comparative study of housing with other sectors on expenditure made,
and resulting growth and income generation. The study attempts to
reassess the income multiplier parameters and suggest the most
appropriate methodology to ascertain income multiplication through
housing.
Assess impact of housing investment on Employment Generation: A
comparative study of expenditure on sectors and resulting employment
generation. The study will attempt to reassess the change in labor
intensity and coefficients across sectors and sector-wise employment
multiplier assumptions to update the comparative employment
potential of the housing sector in terms of volumes and investments.
(b)
The study attempts to assess on a broad basis the inter-linkages between
housing, construction and construction materials and to the extent practicable, the
real estate development sectors, drawing inferences on the drivers of growth and key
points on inter linkages.
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April, 2014
(c)
The study attempts to draw possible inferences for short and long term
policy interventions.
Structure of the Report

1.11
The report is presented in four sections. The first section is introductory and
broadly outlines the importance of housing and construction sectors as generator of
income and employment provider. Inter alia, it also provides an idea of the scope of
study. The second section discusses in detail the methodology used to construct the IO table and the data used. The IO model, multipliers and multiplier analysis to carry
out policy simulations are also described and presented in this section. The following
section contains the results of policy simulations using output, employment, income
and tax multipliers. The concluding section summarizes the major findings of the
study. Inter alia, we indicate briefly the limitations of the study.
2.
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INPUT-OUTPUT ANALYSIS
Introduction
2.1.
Any economic activity of a region has both direct and indirect economic
benefits. Same is the case with construction sector, a vital component of housing
sector. It is evident that when the demand for this sector increases, its output
increases in order to meet this growing demand. This is clearly the sectors direct
impact on the economy. However, in order to meet this demand, the output of those
sectors also increases which provide inputs to construction sector and hence have
strong backward linkages with the sector. These input-providers produce the indirect
impact on the economys output and employment. While the value of output of the
construction sector may reflect the value of inputs, income generated by the
construction sector does not fully account for the income and employment that is
generated by the input suppliers. The multiplier effects of development of the
housing sector on income and employment need to be captured to understand the
impact of development of this sector on the economy.
2.2.
There are a number of ancillary industries which support the growth of
construction sector, like steel, cement, glass, brick, wood and certain consumer
durables etc. Further, the industries that provide the inputs to these ancillary
industries also gain momentum. Hence, due to the inter-linkages among all the
sectors of economy, the overall economic impact of a particular sector far exceeds the
direct impact. The impact arising from such inter-linkages is called indirect impact or
the second-round impact or the spill-over impact.
2.3.
The Input-Output (IO) model is a widely used and scientific method to
measure these inter-linkages and hence arrive at direct as well as indirect impact of
an economic sector. The need for input-output analysis arises from the fact that the
researchers, businesses and government policy makers may want to understand the
inter-industry linkages, linkages between final uses and output and impact of policy
decisions in the economy in terms of employment, income and taxes it generates and
also what capital and imports it needs to grow. The impact analysis can be in terms
of how other industries depend on the industry under study or how this industry
impacts on other industries. An IO model enables these impact analyses as this model
in its simplest form is a full articulation of inter-industry analysis and facilitates
impact analysis.
April, 2014
2.4.
With the quantification of these inter-linkages, it is possible to see how, an
additional demand in a particular sector affects other sectors of the economy through
its backward linkages and vice-versa through the forward linkages. Although some of
these questions can be answered intuitively, but the advantage of the IO model is that
it quantifies the impact through a value of the multiplier by which a particular sector
is expected to grow following a change in demand in the housing sector.
2.5.
The impact estimates derived from the IO analysis is based on the economic
activity during one specific year, for which IO table is constructed. However, the IO
multipliers can be assumed to remain stable during a certain period, typically up to 5
years, unless the economys structure changes significantly.
Applications of IO Tables
2.6.
Input-Output tables, now prepared by most of the economies, are powerful
tools and are applied for various purposes. The primary advantage of input-output
tables is the generation of multipliers output, income and employment multipliers.
Unlike economic base multipliers5, which calculate only one multiplier, input-output
multipliers are calculated for all the industries. It is able to reveal the impact of
growth or decline in one industry on all the other industries of the economy.
Similarly, it generates employment multipliers for all the sectors.
2.7.
Further, with the multiplier analysis, input-output tables can be used for
impact assessment. It brings out the impact of change in final demand of one sector
on the output of that sector as well as the output of all other sectors of the economy.
Another use of these tables is in projections of sectoral level output. By multiplying
the vector of projected or forecasted value of final demand of each industry by the
input coefficient matrix, one arrives at the projected value of output of each industry.
The economic base multiplier corresponds to the economic base theory, which assumes that any local economy
can be divided into two economic activities basic and non-basic. Basic activities are those that produce goods
(services) for export and non-basic activities are those that produce goods (activities) for local use. An increase
(or decrease) in basic activities leads to an increase (decrease) in income flow in the local economy. This results in
the increased (decreased) local demand for goods and services, which in turn increases (decreases) the non-basic
activities. This is called the multiplier effect. The economic base multiplier is usually calculated in terms of
employment and is expressed as the change in total employment in basic and non-basic activities with respect to
change in employment in basic activities.
April, 2014
Limitations of IO Tables
2.8.
The model derived from the table assumes that the present coefficients will
remain constant under the projected conditions. Therefore, it can be used for shortterm projections. In the longer range, coefficients are affected by changes in relative
prices, appearance of new industries or elimination of outdated industries, and
technological change in the production processes (Berke, Godschalk, and Kaiser,
2006). The prices of inputs change over time which may result in the industries
switching to alternative inputs or change the balance between labour and capital
inputs. The greater the rate of economic change in the system, the lesser reliable is
the fixed input-output coefficients. However, the price adjustments could be done
using the price ratios of base year to projected year. By specifying the changes in
technology input-output coefficients can be modified for applications in longer term
projections or analysis.
Input-Output Model for Impact Analysis

2.9.
Input-output analysis starts with the calculation of input-output coefficients.
They are calculated by dividing each entry of the IO table by the corresponding
column total. The input coefficients can be interpreted as the corresponding shares of
costs for goods, services and primary inputs in total input (equals total output). As
the input coefficients cover all inputs including the residual variable operating
surplus, they add up to unity. The primary inputs consist of intermediate imports,
taxes less subsidies on products, compensation of employees, other net taxes on
production, and gross operating surplus.
2.10. The output coefficients describe the output structure of produced goods and
services. The output coefficients are calculated by dividing each entry of the inputoutput table by the corresponding row total. They can be interpreted as the shares in
total output (revenue) or market shares for products and primary inputs. For value
added, they reflect the distribution of primary inputs. The final use here consists of
final consumption expenditures (by households, non-profit institutions serving
households (NPISH) and government), gross fixed capital formation, changes in
inventories and exports of goods and services.
Static IO Model
2.11. The input and output coefficients are used to prepare IO models which are
required for impact analysis and understanding inter-industry linkages. A well
known input-output model is the static input-output system of Wassily Leontief. It is
a linear model which is based on Leontief production functions and a given vector of
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April, 2014
final demand. The objective is to calculate the unknown activity (output) levels for
the individual sectors (endogenous variables) for the given final demand (exogenous
variables).
2.12. As we have seen earlier, the IO table depicts all the inter-industry
transactions of the economy. A row in an I-O table shows the sales made by one
economic sector to various sectors and final uses, whereas a column shows what the
sector purchased from different sectors for its intermediate consumption and
primary inputs, consisting of taxes less subsidies on production and imports, imports
of goods and services, compensation of employees, consumption of fixed capital and
net operating surplus/mixed income. The IO table with n sectors is shown below:
Intermediate uses
123......j.....n
1
2
.
.
I
.
N
Primar
y
inputs
x 11 x 12 ....xi J....x1n
x 21 x 22 ....x2j....x 2n
...............................
..............................
x i1 x i2.......x ij......x in
. .............................
x n1 x n2......xnj.....x nn
p1 p2 ........... pj............. pn
Final uses
Consumpti Capital
on
Formati
expenditur on
e
c1
f1
c2
f2
.
.
.
.
ci
fi
.
.
cn
fn
C
F
Net
Expor
ts
e1
e2
.
.
ei
.
en
E
Gross
output
X1
X2
.
.
Xi
.
Xn
The above matrix represents the following set of n balance equations:x i = x i1 + x
i2 ..................+x in
+y i, i =1,2......n, Yi is final use
Denoting aij for input output coefficient representing the output of sector i absorbed
by sector j per unit of output of sector j, we get,
xi=a i1 x1 + a i2 x 2...........a inx n +y i, i = 1,2........n,
xij=aijxj
These equations can be written in matrix notations as

X=
X=
AX + Y or (I-A)X=Y
(I-A)-1Y
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April, 2014
2.13. A is the input-output coefficient matrix, (I-A) is known as Leontief matrix and
(I-A)-1 is the Leontief inverse matrix. This is the static open input-output model. It is
clear from above that the input-output system attains equilibrium in terms of supply
and demand: when there is a change in the final demand conditions, the application
of input-output system indicates the new set of output levels of sectors that establish
a new equilibrium to meet the changed final demand conditions. Thus, the inputoutput analysis is an economic application of general equilibrium theory, when we
have the coefficient matrix A, and a given final demand vector y.
2.14. On the diagonal of Leontief matrix, net output is given for each sector with
positive coefficients (revenues) while the rest of the matrix covers the input
requirements with negative coefficients (costs). The Leontief inverse (I-A)-1 reflects
the direct and indirect requirements for domestic intermediates for one unit of final
demand. The difference between Inverse Matrix and A matrix corresponds to the
indirect input requirements of the economy for one unit of FD. The column sum of the
inverse can be interpreted as output multiplier which reflects the cumulative revenues
of the economy which are induced by one additional unit of final demand of a certain
product. For example, if the output multiplier of an industry is 2.12 then the increase
of 1 unit in the final demand for this industry translates into the induced cumulative
revenues of 2.12 units in the economy. Further description of multipliers is given in
the section below.
Multipliers
2.15. If the final demand of a particular product increases, there will be an increase
in the output of that product, as production increases to meet the increase in demand.
This is known as direct effect. However, as producers need to increase their output,
they would also need more inputs, therefore, there will also be an increase in demand
for inputs from their suppliers. This process goes on over the entire supply chain.
This is known as indirect effect. The most frequently used types of multipliers in
input-output analysis are those that estimate the effects of the exogenous changes of
final demand (consumption, investment, exports) on outputs of the sectors in the
economy and value added.
2.16. In addition to the indirect effects which arise as a result of inter-industry
linkages, there are induced effects on output, income and employment which are
triggered by the household consumption expenditure. In response to the direct and
indirect effects, the level of household income increases due to increased
employment and a proportion of this increased income are re-spent on consumption
of final goods and services. This is called the induced effect. Hence, these effects
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April, 2014
reflect the changing pattern of households spending with the increase in income due
to additional production. To arrive at the induced effects, the household account is
endogenised into the input-output framework. The household account refers to the
household income (compensation of employees) and expenditure (private final
consumption expenditure).
2.17. As mentioned above, an output multiplier for a sector j is defined as the total
value of production in all sectors of the economy that is necessary at all stages of
production in order to produce one unit of product j for final demand. The inverse
coefficients indicate how many commodities i must be produced in order to satisfy
one unit of final demand for goods and services j. By including the interdependencies
between all activities it is therefore possible to determine the total outputs, i.e.
directly and indirectly required to satisfy a given final demand. The output multiplier
depicts the cumulative revenues of the economy which are induced by one additional
unit of final demand of a certain commodity. Due to this additional unit the output
(production) multipliers are equal to 1 or above 1. The higher the multipliers, the
larger are the effects on the input-output system of the economy.
2.18. The output multiplier is called Type I output multiplier when only direct and
indirect effects are taken into account. This is expressed as the ratio of direct and
indirect output changes to the direct output change due to a unit increase in final
demand. However, when induced effects are also added to direct and indirect effects
by endogenising household account, the multiplier so obtained is called Type II output
multiplier. This is, therefore, expressed as the ratio of total output changes (direct +
indirect + induced) to the direct output change due to a unit increase in final demand.
In other words, multiplying a change in final demand for an industrys output by that
industrys output multiplier (Type I and Type II) will generate an estimate of direct +
indirect effects (in case of Type I) and direct + indirect + induced effects (in case of
Type II).
2.19. The induced effects represent the response by all local industries caused by
increased expenditures of new household income and inter-institutional transfers
generated from the direct and indirect effects of the change in final demand for a
specific industry.
2.20. Similarly, the employment multiplier for jth sector is defined as the ratio of the
total (direct + indirect in case of Type I employment multiplier and direct + indirect +
induced in case of Type II employment multiplier) employment changes per rupees
change of final demand in sector j to the direct employment change per rupees
change of final demand in sector j. The direct employment effect of a rupee worth of
increase in final demand in sector j is obtained from jth sector's employment to output
ratio or employment coefficient. The total employment change per rupees change of
10
April, 2014
final demand in a sector j is estimated by multiplying the row vector of the

employment coefficient with the Leontief Inverse matrix (Mij).
2.21. Income multipliers measure the change in income (compensation of
employees) which occurs throughout the economy as a result of a unit change in
income in a sector. They show the ratio of direct plus indirect (plus induced if Type II
multipliers are used) income changes to the direct income change.
Inter-industry Linkage Analysis

2.22. In the framework of the input-output model, industry production has two
kinds of economic effects on other industries in the economy. These are the
absorption effects and the diffusion effects. When industry i increases its production,
there is increased demand for inputs from industries. In the input-output model, this
demand is referred to as backward linkage. This analyses how a change in final
demand of a sector affects the final demand of the economy. Backward linkage is also
known as output multiplier. An industry with higher backward linkages than other
industries means that expansion of its production is more beneficial to the economy
in terms of causing other induced productive activities. On the other hand, an
increase in production by other industries leads to additional output required from
industry i to supply inputs to meet the increased demand. This supply function is
referred to as forward linkage and helps in analysing how a change in the rest of the
sectors influences a particular one. An industry with higher forward linkages than
other industries means that its production is relatively more sensitive to changes in
other industries output.
2.23. The direct link between final demand and industrial output describes the
deliveries of finished goods and services to the various final demand categories. It
does not take into account the intermediate outputs, i.e. raw materials and semifinished goods which are required to produce finished goods. These intermediates
represent the indirect links between final demand and output levels. The direct and
indirect link can be identified by multiplying the Leontief Inverse with the matrix of
final demand categories ((I-A)-1 * Y). The resulting matrix shows the industrial
output levels directly and indirectly necessary to meet the final demand
requirements. In other words, it indicates the total importance of each category of
final demand for the production of different product groups. In this compilation, all
intermediate consumption part of the domestic output is transferred to the final
demand by using Leontief Inverse.
11
April, 2014
2.24. Further, the interrelation between primary inputs and one unit of production
induced by final demand can be disclosed by multiplying the primary input
coefficients with the Leontief Inverse. The resulting matrix depicts how many
primary inputs are directly and indirectly used within the whole production process
in order to satisfy one unit of final demand for goods and services j. Due to the fact
that the intermediate inputs are converted into primary inputs, the total input
coefficients for primary inputs per unit of production add up to one.
2.25. The multipliers for primary inputs [B (I-A)-1] (B is input coefficients for
primary inputs) are multiplied with a matrix of final demand by category to assess
the direct and indirect primary input requirements for the various categories of final
demand (consumption, investment, exports).
Methodology and Approaches to construct Housing Sector IO Table

2.26. In India, the input-output tables are compiled by CSO periodically, once in
every five years. These tables have complete coverage of the economy and are
consistent with the national accounts. The latest IO table is available for 2007-08.
However, for the present study, we have updated it for 2009-10.
2.27. The detailed IO table consists of 130 sectors, but for a meaningful inputoutput analysis, it is desirable that the sectors are aggregated such that the
aggregation scheme is aligned to the purpose of the analysis. Evidently, the sectors of
interest and the ones which these sectors are closely related to are kept separately,
subject to the availability of their data.
2.28. The aim of the present study is to assess the impact of investment in the
housing sector on GDP and Employment of the Indian Economy. Further, the
objective is to assess the inter-linkages between housing, construction, construction
materials and the real estate development sectors, drawing inferences on the drivers
of growth and key points on inter-linkages.
2.29. In this regard, the CSOs 130 sectors of the 2009-10 IO table are aggregated
to 21 broad sectors6. The list of sectors and their aggregation scheme are given in the
table below:
It may be mentioned that sectors in the input-output tables are not additive, as the information contained in the
IO table is not observable. The observable information (which comes from surveys and administrative data)
forms the basis for compiling supply and use tables, which in turn are converted to IO tables through
transformation models and technology assumptions. The sectors in the supply and use tables are additive.
12
April, 2014
Table 2.1: Aggregation scheme

Sr No
Proposed IO Sectors - Housing Study
Concordance with 130 sectors
Agriculture incl. Livestock
Forestry and Logging
25
Fishing
26
Mining and Quarrying
Construction related Manufacturing
Other Manufacturing
Residential Construction
Non-Residential Construction
Other Construction
10
Electricity, Water Supply
11
Trade
116
12
Hotel and Restaurants
117
13
Railways
109
14
Transport by Other Means
15
Storage
114
16
Communication
115
17
126
19
Real Estate Services

Ownership of Dwelling and Business
Services
Banking and Insurance
20
Public administration and defence
18
21
Other Services
Source: NCAER study team
1-24
27-37
55, 56, 62, 64, 69, 74-77, 79-82, 89
38-54, 57-61, 63, 65-68, 70-73, 78,
83-88, 90-105
106
107, 108
110-113
120, 123-125, 127

118, 119
130
121, 122, 128, 129
2.30. Broadly, the sector classification is the same as followed by CSO in their
National Accounts Statements. However, keeping in view the objectives of the study,
some sectors are further disaggregated to capture the inter-linkages of housing
sector. This disaggregation of sectors is as follows:
Manufacturing sector is split into Construction related manufacturing and

Other Manufacturing. The sectors that include Construction related
manufacturing were Furniture and fixtures, wood & wood products, plastic
products, coal tar products, paints, varnishes & lacquers, non-metallic mineral
products, ferrous and non-ferrous metals & products, electrical cables & wires.
Therefore for a condensed IO table, one needs to recompile the supply and use tables at that condensed dimension
and then the transformation models and technology assumptions are applied to get to an aggregated IO table.
13
April, 2014
Construction sector is divided into residential construction, non-residential

construction and other construction activities. Residential construction
refers to the general construction of residential buildings, carried out on ownaccount or on a fee or contract basis. Non-residential construction is the
construction of non-residential buildings, like schools, offices, and hospitals
etc, carried out on own-account or on a fee or contract basis. All other
construction activities construction and maintenance of roads, rail-beds,
bridges, tunnels, pipelines, rope-ways, ports, harbours, runways, power,
telecommunication and transmission lines, waterways, hydro-electric projects
etc. come under Other Construction.
The NAS sector, Real Estate, Ownership of dwellings and business services is
disaggregated into Real Estate and Ownership of dwellings and business
services.
Hence we arrive at an IO table of 21 broad sectors.

2.31. As indicated in the aggregation scheme, barring the three components of
Construction sector, all other sectors are arrived by aggregated the existing 130
sectors of the detailed IO table. The values for these three components, that is,
residential construction, non-residential construction and other construction, are
obtained by splitting each cell of the row of the total Construction sector in the
proportion of the share of their value of output in total. The values of output are
taken from the NAS.
2.32. The CSOs IO tables do not provide employment information. However,
NCAER while updating the IO table to 2009-10 also included the employment in the
IO table. To arrive at the number of persons employed in each sector, the unit level
data of NSSO large scale survey on Employment and Unemployment for 2009-10
was analysed. The 21 sectors were mapped with the NIC 5-digit codes, the industrial
codes used to identify the sector of engagement of each employed person. The
mapping of 21 sectors with the NIC codes is given in the table below:
14
April, 2014
Table 2.2: Mapping between 21 sectors and NIC codes

Sr No
Proposed IO Sectors - Housing Study
Concordance with NIC-2004
01111-01500
02001-02006
Fishing
05011-05023
Other Manufacturing
Other Construction
10
11
Trade
12
13
Railways
60101-60109
14
60211-63090
15
Storage
63021-63023
16
Communication
64110-64204
17
70101-70200
19

Services
20
75111-75302
18
21
Other Services
10101-14299
19202(part), 20101-20299, 23101-23109,
24221-24229, 25201-27209, 27320, 2811128129, 28920-28932, 28939, 28991-28999,
31300, 36101-36103, 37100-37200
15111-15127, 15131-15209, 15315-15429,
15424-15549, 16001-16009, 17111-17134,
17137-19209, 21011-22300, 23201-24219,
24231-25119, 27310, 28131-28910, 28933,
29111-29309, 30001-31200, 31401-35999,
36104-35999, 36104-36933, 36994-36999,
40200, 50404, 52601-52609
45201
45202
45101-45102, 45203-45500
40101-40109, 40300, 41000
50101-50103, 50300, 50401-50403, 50500,
51101-51909, 52110-52599
55101-55109, 55201-55209
71110-74999
65110-67200
80101-80904, 85110-85320, 90001-99000
2.33. Construction, by its nature of activity, generates a large proportion of

informal employment which mostly comprises of casual labour. On the other hand,
construction companies or the factor owners fall into the formal employment
category. Hence, it is worthwhile disaggregating the total employment of all the 21
sectors into formal and informal categories. By doing this, we can not only generate
the total employment coefficients and employment multipliers but also formal and
informal employment coefficients and multipliers.
15
April, 2014
2.34. For identifying the formal and informal nature of job, the person employed is
classified accordingly using the information on his/her status of work and the
enterprise in which employed. On the basis of this information, a person is identified
as formal and informal using the mapping given in table below:
Table 2.3: Identification of Formal/Informal workers (EUS)

Enterprise Type
1. Proprietary male
2. Proprietary female
3. Partnership with members of same household
4. Partnership with members of diff household
5. Public sector
6. Public/Private limited company
7. Co-operative societies/trust/other non profit
institutions
8. Employer's households
9. Others
Formal
Informal
None
All
Status=Regular wage
earner
Status= Regular wage
earner
Status= Regular wage
earner and number of
workers > 5 and job
contract is written and is
for more than 1 year
Status=Others
Status= Others
Rest
2.35. All the employees working in the proprietary and partnership types of
enterprises are considered as informal. Barring the regular wage earners, all others
are considered to be informal in public sector or public ltd. enterprises.
2.36. In rest of the enterprises, like cooperatives, household enterprises etc., those
regular wage earners are considered formal who work in enterprises that employ
more than 5 workers and who have written job contract and the duration of contract
is more than a year. Rest all are considered informal.
Sectoral Aggregates
2.37. Apart from the inter-industry transactions, the input-output table presents
various aggregates for all the sectors, like Gross Value of Output, Gross Fixed Capital
Formation (GFCE) and Indirect taxes. Besides, employment numbers are estimated
using the NSSO survey data. The tables below present the share of each sector in total
for these aggregates.
16
April, 2014
Table 2.4: Sectoral share in key aggregates of IO Table (%)

Gross output
at factor cost
1
Net Capital
Stock
GFCF
Indirect
Taxes on
production
10.83
8.71
9.98
5.00
0.96
0.07
0.16
0.24
Fishing
0.48
0.58
0.32
0.18
1.65
3.91
2.99
0.87
8.59
8.05
7.72
13.81

Construction related
Manufacturing
Other Manufacturing
26.55
20.22
19.47
44.12
1.24
0.54
0.49
1.36
6.71
2.63
2.41
7.83
Other Construction
3.44
1.27
1.16
4.15
10
2.09
6.30
6.67
2.19
11
Trade
9.24
6.70
6.60
3.03
12
2.10
1.48
1.10
1.45
13
Railways
0.76
1.54
1.66
0.62
14
6.89
2.86
2.29
9.83
15
Storage
0.05
0.09
0.11
0.04
16
Communication
0.95
3.61
1.97
0.64
17
0.24
0.51
0.60
0.15
6.01
14.16
16.52
1.65
19

Ownership of Dwelling and
Business Services
3.11
0.47
0.71
0.70
20
3.19
10.08
11.79
0.00
21
Other Services
4.94
6.23
5.27
2.14
100.00
100.00
100.00
100.00
18
Source: NCAERs 21-sector IO Table
17
April, 2014
Table 2.5: Sectoral share in employment (%)
0.86
57.99
54.17
Share of
Informal in
Total
employme
nt (%)
99.89
0.18
0.23
0.23
94.87
Fishing
0.09
0.34
0.33
98.24
2.59
0.45
0.59
70.80
3.27
2.60
2.64
91.71

Manufacturing
Other Manufacturing
12.54
7.68
8.01
89.53
0.61
7.31
6.86
99.41
0.13
0.44
0.42
97.86
Other Construction
1.66
4.42
4.24
97.38
10
2.72
0.06
0.24
23.38
11
Trade
2.70
8.37
7.99
97.74
12
0.46
1.25
1.20
97.41
13
Railways
2.62
0.03
0.20
12.46
14
3.18
3.47
3.45
93.83
15
Storage
0.22
0.02
0.03
57.11
16
Communication
2.77
0.17
0.35
46.44
17

Business Services
Public administration and
defence
Other Services
0.12
0.14
0.14
94.22
4.76
0.71
0.98
67.55
6.71
0.32
0.75
39.82
26.10
0.05
1.79
2.55
25.71
3.94
5.40
68.17
100.00
100.00
100.00
93.31
18
19
20
21
Source: NSSO
66th
Formal
employment
Informal
Employment
Total
employment
Round survey, 2009-10
18
April, 2014
2.38. The relative importance of each of these sectors can be assessed by ranking
the sectors in decreasing order of their share in respective aggregates.
Table 2.6 : Sectors rank on share in respective aggregates

Gross
output
at
factor
cost
GFCF
Net
Capital
Stock
Indirec
t Taxes
on
produc
tion
Formal
employ
ment
Inform
al
Emplo
yment
Total
employ
ment
14
Agriculture incl.
Livestock
16
21
20
17
18
15
18
Fishing
19
16
19
18
21
13
16
14
13
12
11
13
15
17
18
12
15
12
10
19
12
14

Manufacturing
Other Manufacturing
Residential
Construction
Non-Residential
Construction
Other Construction
15
14
13
10
13
18
17
11
Trade
10
12
12
14
15
11
16
10
13
18
13
13
16
11
20
19
11
11
15
Railways
Transport by Other
Means
Storage
21
20
21
20
17
21
21
16
Communication
17
10
12
15
16
15
20
18
17
19
20
17
20
10
10
11
11
19
16
14
14
12
10
21
19
5
6
7
8
14
17

Ownership of Dwelling
18
and Business Services
19 Banking and Insurance
Public administration
20
and defence
21 Other Services
2.39. Other Manufacturing which refers to all manufacturing sectors excluding

construction related manufacturing ranks first in the share in total value of output,
fixed investment (GFCF), inventory (Net Capital Stock) and Indirect taxes. The rank of
residential construction is 15th among 21 sectors with regard to its share in total
value of output. Its rank in fixed investment and inventory is even lower at 17th and
19
April, 2014
18th respectively. However, the sectors share in both total employment and total
informal employment is fourth which means that residential construction sector is
highly labour intensive sector as compared to other sectors. While agriculture
accounts for 54 per cent in total employment, share of residential construction stands
at 6.9 per cent. Excluding agriculture, its share goes up to 15 per cent, next only to
other manufacturing and trade.
2.40. The capital to output ratio (Table 2.7) of residential construction, expressed
as a unit value of capital stock per 100 unit value of output, is 0.61. This means that
for residential construction, Rs. 0.61 lakh of capital stock produces Rs. 1 crore of
output. As compared to this, the capital to output ratio for all the sectors of economy,
put together, is higher at 1.53.
2.41. On the other hand, labour to output ratio of residential construction is the
highest, at 2.34, among all the 21 sectors. The overall labour to output ratio is 0.42.
This means that on an average 0.42 persons are required to produce a lakh unit of
output whereas for residential construction, 2.34 persons are required to produce a
lakh unit of output, accentuating the fact that residential construction is a highly
labour generating sector and is less capital intensive as compared to other sectors of
the economy.
2.42. Further, as given in Table 2.5, the share of informal employment in total
employment in residential construction is 99.41 per cent, second highest share
among all the sectors, next only to agriculture. This share in overall employment for
the economy is 93.31 per cent.
20
April, 2014
Table 2.7 : Capital and Labour to output ratios
Capital to Output Ratio

(units of capital per 100
units of output)
Labour to Output Ratio

(persons per lakh unit of
output)
1.41
2.11
0.26
0.10
Fishing
1.01
0.29
2.78
0.15
1.38
0.13

Manufacturing
Other Manufacturing
1.12
0.13
0.61
2.34
0.55
0.03
Other Construction
0.52
0.52
10
4.89
0.05
11
Trade
1.09
0.36
12
0.80
0.24
13
Railways
3.35
0.11
14
0.51
0.21
15
Storage
3.36
0.29
16
Communication
3.19
0.15
17

Business Services
defence
Other Services
3.84
0.25
4.21
0.07
0.35
0.10
5.65
0.24
1.63
0.46
1.53
0.42
18
19
20
21
Overall
Estimates of Inter-Industry Linkages

2.43. Using the Leontief Inverse matrix, various multipliers can be obtained like
output multiplier, employment multiplier and income multiplier, which gives an
estimate of direct and indirect effects resulting from change in final demand of a
sector, hence referred as Type I multipliers. Further, the extended Leontief Inverse
Matrix, where households are included in the analysis and considered a separate
sector, gives the measure of direct, indirect and induced effects resulting from change
in final demand of a sector, referred as Type II multipliers. In the extended Leontief
21
April, 2014
Inverse Matrix, a row and column are added for compensation of employees (CoE)
and private final consumption expenditure coefficients respectively.
2.44.
A=
The structure of the extended technical coefficients matrix is as follows:

AII
AHI
AIH
AHH
where,
AII is the i X j technical coefficient matrix A.
AIH is the column vector of household expenditure coefficients and refers to the
amount of industry i required per unit of total household income
AHI is the row vector of income coefficients and refer to the income paid to
households per unit of output of industry i (compensation of employees divided by
the total output of the industry)
AHH is the household expenditure per unit of household income (this cell is set to
zero)
2.45.
The multipliers obtained using Leontief Inverse Matrix and extended
Leontief Inverse Matrix are described in the following sections.
Output Multiplier
2.46. As mentioned in the previous section, the column sum of the Leontief Inverse
Matrix, called Type I output multiplier, is the measure of inter-industry linkages and
gives an estimate of direct and indirect effects of an industry on the overall economy.
Similarly, the column sum of the extended Leontief Inverse Matrix (excluding the
element of row for compensation to employees), called Type II output multiplier, is
also the measure of inter-industry linkages where household is included as an added
industry. The following table presents the output multiplier of each of the 21
industries. Also given are sectors CoE to output ratio (CoE/Q). It should be noted that
sectors with high CoE/Q ratio have high values of Type II multipliers as the
proportion of household income in total output is high and therefore, the changes in
their final demand gets translated into increased household income faster than
sectors with low CoE/Q ratio.
22
April, 2014
Table 2.8: Output Multiplier
CoE/Q
Type I Output
Multiplier
Type II Output
Multiplier
0.1160
1.6042
2.8481
0.0512
1.3337
1.9270
Fishing
0.0838
1.3046
2.0593
0.2094
1.5257
3.3793
0.0398
2.5887
4.0237

Manufacturing
Other Manufacturing
0.0479
2.6369
4.2071
0.2689
2.3322
5.1148
0.2419
2.4174
5.0807
Other Construction
0.2271
2.4641
5.0621
10
0.1829
2.2257
4.6008
11
Trade
0.1239
1.4037
2.5706
12
0.0918
2.2477
3.7982
13
Railways
0.4334
1.8970
5.5860
14
0.0932
2.3670
3.9168
15
Storage
0.2031
1.9180
4.0741
16
Communication
0.2886
1.5719
3.9428
17
0.0207
1.4207
1.8313
0.0610
1.3734
2.1414
19

Business Services
0.2566
1.3211
3.3497
20
0.8880
1.0000
6.9693
0.4479
1.4728
4.9103
18
21
Other Services
Source: NCAER computation
2.47. An output multiplier of 2.33 for residential construction means that a unit
increase in final demand for residential construction is expected to result in an
overall increase in the economys output by 2.33 units owing to its inter-industry
linkages with other sectors of the economy. With induced effects, the overall increase
in economys output is expected to be 5.11 units.
2.48. The table below gives the ranking of the 21 sectors with respect to both Type
I and Type II output multipliers.
23
April, 2014
Table 2.9: Sectors ranking on Output multiplier

Rank on Type I
Output
Multiplier
Rank on Type II
Output
Multiplier
11
16
18
20
Fishing
20
19
13
14
10
Other Manufacturing
Other Construction
10
11
Trade
16
17
12
13
13
Railways
10
14
12
15
Storage
16
Communication
12
11
17
15
21
17
18
19

Services
19
15
20
21
14
18
21
Other Services
2.49. Residential construction occupies sixth and third positions respectively

when Type I and Type II output multipliers of all the 21 sectors are arranged in
decreasing order. The highest Type I output multiplier is that of Other
manufacturing followed by Construction related manufacturing and then Other
construction and Non-residential construction. Hence, construction, as a whole,
has strong backward linkages with other sectors of the economy. An increase in final
demand in these sectors triggers economic activity in other sectors much faster, due
to their stronger spill-over effects. On the other hand, Type II output multiplier is the
highest for Public Administration and Defence followed by Railways which have
high income (CoE) to output ratios.
24
April, 2014
2.50. The following table presents the increase in output in each sector with a unit
increase in final demand of residential construction. In other words, this table
presents the break-up of the output multiplier (2.33) of residential construction.
Table 2.10: Output multiplier of Residential Construction by sectors

Unit increase in sectoral output with one unit increase in
final demand of Residential Construction
Type I Output Multiplier
Type II Output Multiplier
0.0533
0.4864
0.0452
0.0690
Fishing
0.0002
0.0223
0.1164
0.2521
0.4378
0.5960
Other Manufacturing
0.2063
0.9908
1.0136
1.0175
0.0737
0.0948
Other Construction
0.0378
0.0486
10
0.0493
0.1074
11
Trade
0.1288
0.3802
12
0.0118
0.0960
13
Railways
0.0082
0.0327
14
0.0679
0.2997
15
Storage
0.0007
0.0020
16
Communication
0.0029
0.0374
17
0.0015
0.0122
0.0187
0.2224
19

Business Services
0.0488
0.1496
20
0.0000
0.0000
21
Other Services
0.0093
0.1974
2.3322
5.1148
18
Overall
2.51. The table suggests that when the final demand of residential construction
increases by one unit, then the overall increase in total output of the economy is led
by additional economic activity spurred in other sectors due to inter-industry
linkages. For example, owing to direct and indirect effects, Construction related
manufacturing increases its output by 0.4378 units, other manufacturing by
25
April, 2014
0.2063, mining & quarrying by 0.1164, and so on, the aggregate Type I increase
being of 2.3322 units. The second column of the table presents the unit increase in
output on the back of direct, indirect and induced effects. The aggregate increase in
output of 5.1148 units is led by 0.9908 units increase in other manufacturing,
0.5960 units in construction related manufacturing and so on.
Employment Multiplier
2.52. As mentioned earlier, Type I employment multiplier for jth sector is the ratio
of the total (direct + indirect) employment changes per rupees change of final
demand in sector j to the direct employment change per rupees change of final
demand in sector j. Type II employment multiplier for jth sector is the ratio of the
total (direct + indirect + induced) employment changes per rupees change of final
demand in sector j to the direct employment change per rupees change of final
demand in sector j.
2.53. The direct employment change per rupees change in final demand in sector j
is obtained from jth sector's employment to output ratio or direct employment
coefficient. In case of Type I employment multiplier, the total employment change per
rupees change in final demand in a sector j (total linkage coefficient comprising direct
and indirect effects) is estimated by multiplying the row vector of the employment
coefficient with the Leontief Inverse matrix. For Type II employment multiplier, the
row vector of the employment coefficient is multiplied by the extended Leontief
Inverse matrix to arrive at total linkage coefficient comprising of direct, indirect and
induced effects.
2.54. The Type I and Type II employment multipliers are also obtained for formal
and informal types of employments. The employment coefficients and employment
multipliers for all the 21 sectors are given in the following tables:
26
April, 2014
Table 2.11 : Direct Employment Coefficient
S.
No.
Sectors
Direct Employment coefficient (persons employed per lakh

unit of output)
Formal
Informal
Total
0.0022
2.1081
2.1103
0.0052
0.0959
0.1010
Fishing
0.0050
0.2805
0.2855
0.0443
0.1075
0.1518
0.0107
0.1189
0.1297

Manufacturing
Other Manufacturing
0.0133
0.1139
0.1272
0.0138
2.3266
2.3404
0.0006
0.0256
0.0261
Other Construction
0.0136
0.5061
0.5198
10
0.0367
0.0112
0.0479
11
Trade
0.0082
0.3566
0.3649
12
0.0062
0.2338
0.2401
13
Railways
0.0976
0.0139
0.1114
14
0.0130
0.1981
0.2111
15
Storage
0.1229
0.1636
0.2865
16
Communication
0.0823
0.0714
0.1537
17
0.0144
0.2349
0.2493
0.0223
0.0465
0.0689
19

Business Services
0.0609
0.0403
0.1012
20
0.2304
0.0060
0.2364
21
Other Services
0.1468
0.3143
0.4611
0.0282
0.3936
0.4218
18
Overall
27
April, 2014
Table 2.12 : Total (Direct + Indirect) Employment Linkage Coefficient

S.
No.
Sectors
Total (Direct + Indirect) employment linkage coefficient

Formal
Informal
Total
0.0121
2.5362
2.5482
0.0119
0.2059
0.2178
Fishing
0.0101
0.3678
0.3779
0.0575
0.2481
0.3056
0.0441
0.5179
0.5620

Manufacturing
Other Manufacturing
0.0471
0.7440
0.7910
0.0372
2.6533
2.6905
0.0255
0.3732
0.3987
Other Construction
0.0394
0.8652
0.9046
10
0.0696
0.2760
0.3456
11
Trade
0.0179
0.4779
0.4958
12
0.0212
1.4651
1.4863
13
Railways
0.1178
0.2419
0.3597
14
0.0360
0.7771
0.8131
15
Storage
0.1445
0.3738
0.5184
16
Communication
0.0951
0.2292
0.3243
17
0.0243
0.3740
0.3983
0.0329
0.1509
0.1838
19

Business Services
0.0692
0.1391
0.2084
20
0.2304
0.0060
0.2364
0.1600
0.4796
0.6396
18
21
Other Services
2.55. The total employment linkage coefficient calculates the impact on

employment throughout the economy arising from a change in final demand for a
sector of 1 unit. According to Table 2.12, an increase of Rs. 1 lakh in final demand in
residential construction is expected to generate a total of 2.69 jobs in the economy
owing to the sectors direct and indirect linkages. Of these, 2.34 jobs are created as a
direct effect (Table 2.11). Hence, for every one job directly created in residential
construction, 1.15 additional jobs are created in the economy (Table 2.13).
2.56. As is evident, residential construction leads all other sectors, with the
highest value of direct and total employment linkage coefficient of 2.34 and 2.69
respectively. However, when it comes to Type I employment multiplier (ratio of total
employment linkage coefficient to direct employment coefficient), non-residential
28
April, 2014
construction notches the highest position, with the value of 15.25. This means that a
total of 15.25 jobs are created in the economy as a result of an increase in final
demand in non-residential construction which is enough to create one job in this
sector. In other words, for every one job directly created in non-residential
construction, 15.25 new jobs are created in the economy. Also, for every one formal
job directly created, 45.61 new formal jobs are created in the economy.
Table 2.13 : Type I Employment Multiplier
S.
No.
Sectors
Type I employment multiplier

Formal
Informal
Total
5.4017
1.2031
1.2075
2.2890
2.1482
2.1555
Fishing
2.0190
1.3113
1.3237
1.2965
2.3078
2.0125
4.1067
4.3540
4.3335

Manufacturing
Other Manufacturing
3.5336
6.5340
6.2198
2.6961
1.1404
1.1496
45.6094
14.5913
15.2546
Other Construction
2.8891
1.7095
1.7404
10
1.8965
24.6384
7.2130
11
Trade
2.1731
1.3400
1.3589
12
3.4037
6.2657
6.1914
13
Railways
1.2074
17.4237
3.2279
14
2.7686
3.9232
3.8520
15
Storage
1.1763
2.2853
1.8096
16
Communication
1.1545
3.2109
2.1095
17
1.6869
1.5920
1.5975
1.4718
3.2441
2.6690
19

Business Services
1.1368
3.4543
2.0595
20
1.0000
1.0000
1.0000
1.0902
1.5260
1.3872
18
21
Other Services
2.57. The following tables present the impact of induced effects besides direct and
indirect effects. Table 2.14 depicts the total (direct + indirect + induced) employment
linkage coefficient and Table 2.15 presents the Type II employment multiplier.
29
April, 2014
Table 2.14: Total (Direct + Indirect + Induced) Employment Linkage Coefficient

S.
No.
Sectors
Total (Direct + Indirect + Induced) employment linkage

coefficient
Formal
Informal
Total
0.0439
3.1144
3.1583
0.0270
0.4817
0.5087
Fishing
0.0294
0.7186
0.7480
0.1049
1.1097
1.2146
0.0808
1.1849
1.2657

Manufacturing
Other Manufacturing
0.0872
1.4738
1.5610
0.1084
3.9467
4.0551
0.0936
1.6111
1.7047
Other Construction
0.1058
2.0728
2.1786
10
0.1304
1.3799
1.5103
11
Trade
0.0478
1.0203
1.0681
12
0.0609
2.1857
2.2466
13
Railways
0.2122
1.9566
2.1687
14
0.0757
1.4974
1.5731
15
Storage
0.1997
1.3760
1.5757
16
Communication
0.1557
1.3312
1.4870
17
0.0348
0.5648
0.5997
0.0525
0.5079
0.5604
19

Business Services
0.1211
1.0820
1.2031
20
0.3831
2.7806
3.1637
0.2479
2.0774
2.3253
18
21
Other Services
30
April, 2014
Table 2.15 : Type II Employment Multiplier
S.
No.
Sectors
Type II employment multiplier

Formal
Informal
Total
19.66
1.48
1.50
5.22
5.03
5.03
Fishing
5.87
2.56
2.62
2.37
10.32
8.00
7.52
9.96
9.76

Manufacturing
Other Manufacturing
6.55
12.94
12.27
7.85
1.70
1.73
167.51
62.99
65.22
Other Construction
7.76
4.10
4.19
10
3.55
123.19
31.52
11
Trade
5.79
2.86
2.93
12
9.77
9.35
9.36
13
Railways
2.17
140.91
19.46
14
5.81
7.56
7.45
15
Storage
1.63
8.41
5.50
16
Communication
1.89
18.65
9.67
17
2.42
2.40
2.41
2.35
10.92
8.14
19

Business Services
1.99
26.86
11.89
20
1.66
461.74
13.38
1.69
6.61
5.04
18
21
Other Services
Income Multiplier
2.58. Like employment coefficient, income coefficient is the income change per
rupees change in final demand in sector j and is obtained from jth sector's income
(compensation to employees) to output ratio. In the case of Type I income effects, the
total income change per rupees change in final demand in a sector j (total income
effects comprising direct and indirect effects) is estimated by multiplying the row
vector of the income coefficient with the Leontief Inverse matrix. For Type II income
effects, the row vector of the income coefficient is multiplied by the extended Leontief
31
April, 2014
Inverse matrix to arrive at total linkage effects comprising of direct, indirect and
induced effects.
2.59. Type I income multiplier for jth sector is the ratio of the total (direct +
indirect) income change per rupees change of final demand in sector j to the direct
income change per rupees change of final demand in sector j. Type II income
multiplier for jth sector is the ratio of the total (direct + indirect + induced) income
changes per rupees change of final demand in sector j to the direct income change per
rupees change of final demand in sector j. The income linkages and multipliers are
given in the tables below:
Table 2.16: Type I Income linkages

Type I
Total Income (Direct +
Indirect) linkage
Income Multiplier
0.1851
1.5959
0.0883
1.7236
Fishing
0.1123
1.3405
0.2758
1.3168
0.2135
5.3596

Manufacturing
Other Manufacturing
0.2336
4.8742
0.4140
1.5395
0.3962
1.6382
Other Construction
0.3865
1.7022
10
0.3533
1.9315
11
Trade
0.1736
1.4016
12
0.2307
2.5126
13
Railways
0.5488
1.2661
14
0.2305
2.4727
15
Storage
0.3207
1.5792
16
Communication
0.3527
1.2221
17
0.0611
2.9519
0.1142
1.8730
19

Business Services
0.3018
1.1759
20
0.8880
1.0000
0.5114
1.1416
18
21
Other Services
32
April, 2014
Table 2.17: Type II Income linkages

Type II
Total Income (Direct +
Indirect + Induced)
Income Multiplier
linkage
1
0.3411
2.9413
0.1627
3.1766
Fishing
0.2069
2.4705
0.5082
2.4270
0.3934
9.8778

Manufacturing
Other Manufacturing
0.4305
8.9833
0.7629
2.8373
0.7302
3.0192
Other Construction
0.7123
3.1371
10
0.6512
3.5598
11
Trade
0.3199
2.5832
12
0.4251
4.6308
13
Railways
1.0114
2.3334
14
0.4249
4.5573
15
Storage
0.5911
2.9105
16
Communication
0.6500
2.2523
17
0.1126
5.4405
0.2106
3.4520
19

Business Services
0.5562
2.1672
20
1.6366
1.8430
0.9425
2.1041
18
21
Other Services
2.60. For residential construction, Type I income multiplier of 1.5395 indicates

the total (direct + indirect) increase in income that results from a unit change in
income in this sector. With induced effects included, this multiplier goes up to 2.8373.
Tax Multiplier
2.61. Tax multiplier gives the extra indirect tax (on production) collected on
account of increase in production led by increase in final demand. Indirect tax, paid
by industries, is a row in the IO table. Tax coefficient for jth sector is its tax to output
ratio. In the case of Type I tax effects, the total change in tax collection per rupees
change in final demand in a sector j (total effects comprising direct and indirect
33
April, 2014
effects) is estimated by multiplying the row vector of the tax coefficient with the
Leontief Inverse matrix. For Type II tax effects, the row vector of the tax coefficient is
multiplied by the extended Leontief Inverse matrix to arrive at total linkage effects
comprising of direct, indirect and induced effects.
2.62. Type I tax multiplier for jth sector is the ratio of the total (direct + indirect)
tax change per rupees change of final demand in sector j to the direct tax change per
rupees change of final demand in sector j. Type II tax multiplier for jth sector is the
ratio of the total (direct + indirect + induced) tax changes per rupees change of final
demand in sector j to the direct tax change per rupees change of final demand in
sector j. The tax linkages and multipliers are given in the tables below:
Table 2.18: Type I Tax linkages

Type I
Tax to Output
ratio
Total Tax
(Direct +
Indirect)
linkage
Tax Multiplier
0.0106
0.0234
2.2112
0.0058
0.0140
2.4254
Fishing
0.0084
0.0164
1.9436
0.0121
0.0252
2.0787
0.0368
0.0767
2.0831

Manufacturing
Other Manufacturing
0.0381
0.0773
2.0316
0.0251
0.0600
2.3851
0.0267
0.0638
2.3851
Other Construction
0.0276
0.0659
2.3852
10
0.0240
0.0523
2.1747
11
Trade
0.0075
0.0167
2.2263
12
0.0158
0.0395
2.4925
13
Railways
0.0188
0.0419
2.2273
14
0.0327
0.0664
2.0334
15
Storage
0.0176
0.0403
2.2856
16
Communication
0.0155
0.0308
1.9859
17
0.0140
0.0203
1.4540
0.0063
0.0137
2.1759
19

Business Services
0.0052
0.0122
2.3585
20
0.0000
0.0000
0.0099
0.0207
2.0893
18
21
Other Services
34
April, 2014
Table 2.19: Type II Tax linkages

Type II
Total Tax (Direct +
Indirect) linkage
Tax Multiplier
0.0503
4.7540
0.0269
4.6469
Fishing
0.0327
3.8805
0.0653
5.3927
0.1078
2.9264

Manufacturing
Other Manufacturing
0.1113
2.9246
0.1202
4.7808
0.1214
4.5402
Other Construction
0.1221
4.4204
10
0.1037
4.3142
11
Trade
0.0420
5.5938
12
0.0730
4.6127
13
Railways
0.1218
6.4699
14
0.1000
3.0603
15
Storage
0.0870
4.9314
16
Communication
0.0821
5.2970
17
0.0292
2.0896
0.0303
4.8167
19

Business Services
0.0561
10.8343
20
0.1292
0.0951
9.5876
18
21
Other Services
2.63. For residential construction, tax to output ratio is 0.0251, that is, for every
unit output, 0.0251 units of indirect taxes are paid (as a direct effect). The sectors
Type I tax linkage coefficient is 0.06. This means that with one unit increase in final
demand in this sector, a total of 0.06 units of tax are collected in the economy, owing
to the sectors inter-linkages. With induced effects included, this linkage coefficient
goes up to 0.1202.
35
April, 2014
36
3.
April, 2014
IMPACT OF HOUSING DEMAND ON ECONOMY
3.1.
The aim of the study is to assess the impact of increase in demand in the
housing sector (through investment or expenditure) on the overall GDP and
Employment of the Indian Economy. Having obtained the output and employment
multipliers, these objectives can be achieved through the multiplier analysis by
carrying out some simulations. This chapter presents these simulations and help in
analysing the relationship between increase in demand in a sector on subsequent
changes occurring in the overall production and employment generation.
Simulation 1: 10% increase in final demand of residential construction
3.2.
Since residential construction is the closest proxy for housing sector, first
simulation examines the impact of a 10 per cent increase in its final demand on the
overall GDP and employment. In absolute value terms, final demand of residential
construction is Rs. 1.28 lakh crore. A 10 per cent increase amounts to an increase by
Rs. 0.128 lakh crore in its final demand. The estimates of direct and indirect increase
in output and employment of all the 21 sectors, resulting from 10% increase in final
demand of residential construction are given in Table 3.1. This increase refers to
the Type I increase or the impact of direct and indirect effects. Type II impact is
shown in Table 3.2.
3.3.
The table suggests that a 10% increase in final demand in residential
construction leads to an increase in its own production by 8.26% and the overall
production or output of the economy gets a boost by 0.24% owing to the interlinkages with other sectors of the economy. The GDP (obtained using the GDP to
output ratio from the IO table) increases by 0.2 per cent. In absolute value terms, the
GDP at factor cost increases by over Rs. 12 thousand crore.
3.4.
Further, a 10% increase in final demand in residential construction
generates 34.4 lakh new jobs in the economy, an increase of 0.64 per cent. The overall
household income steps up by Rs. 5300 crore, equivalent to an increase of 0.27 per
cent. And an additional indirect tax worth Rs. 768 crore are expected to be paid by
the industries, on account of increased production. The sectoral increases in these
parameters are presented in Table 3.2. Similar interpretation can be done for the
Type II impact, given in Table 3.3. It can be checked that the absolute increase in each
parameter is equal to the product of the absolute increase in final demand of
residential construction and the respective multiplier.
37
April, 2014
Table 3.1: Type I impact of a 10% increase in Final Demand in residential

(Rs. lakh)
Type I effects
Output
Original
Fishing
Increased
Absolute
increase
%
increase
13,74,65,395
13,75,33,629
68234
0.05
1,21,35,201
1,21,93,036
57835
0.48
61,09,700
61,09,932
232
0.00
2,09,50,522
2,10,99,531
149009
0.71
Manufacturing
10,90,36,600
10,95,97,016
560416
0.51
Other Manufacturing
33,71,47,774
33,74,11,815
264041
0.08
1,57,08,719
1,70,06,264
1297545
8.26
8,51,46,005
8,52,40,410
94405
0.11
Other Construction
4,36,82,177
4,37,30,609
48432
0.11
10
2,65,20,746
2,65,83,873
63127
0.24
11
Trade
11,73,30,313
11,74,95,224
164910
0.14
12
2,66,84,675
2,66,99,792
15117
0.06
13
Railways
96,24,328
96,34,886
10557
0.11
14
8,75,15,741
8,76,02,669
86928
0.10
15
Storage
6,39,577
6,40,435
858
0.13
16
Communication
1,20,30,753
1,20,34,404
3651
0.03
17
30,44,536
30,46,478
1942
0.06
18

Business Services
7,62,71,845
7,62,95,726
23881
0.03
19
3,94,61,718
3,95,24,199
62482
0.16
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,27,29,987
11866
0.02
1,26,97,87,544
1,27,27,73,013
2985469
0.24
GDP at factor cost (Rs. Lakh)
60,91,48,501
61,03,71,786
1223285
0.20
Employment (numbers)
53,55,39,392
53,89,83,636
3444244
0.64
Income - CoE (Rs. Lakh)
19,34,17,100
19,39,47,011
529911
0.27
Indirect Tax (Rs. Lakh)
2,90,84,726
2,91,61,486
76759
0.26
Total Output (Rs. Lakh)
38
April, 2014
Table 3.2: Sectoral increase (Type I) in various parameters following

Simulation 1
(Rs. lakh)
Type I effects
Increase in
Employment
(in number)
Value Added
CoE
Indirect Tax
46,905
1,43,998
7912
723
48,813
5,843
2962
334
Fishing
199
66
19
1,11,994
22,625
31204
1804
Manufacturing
1,26,832
72,679
22322
20641
Other Manufacturing
49,572
33,579
12653
10049
5,04,753
30,36,734
348894
32621
33,034
2,467
22832
2525
Other Construction
15,910
25,174
10997
1338
10
24,968
3,025
11548
1517
11
Trade
1,31,361
60,170
20425
1237
12
4,981
3,629
1388
239
13
Railways
6,386
1,177
4576
199
14
32,291
18,350
8105
2839
15
Storage
508
246
174
15
16
Communication
2,726
561
1054
57
17
1,411
484
40
27
18

Business Services
19,053
1,644
1457
150
19
52,513
6,321
16035
324
20
21
Other Services
9,076
5,471
5315
118
12,23,285
34,44,244
529911
76759
Overall
39
April, 2014
Table 3.3: Type II impact of a 10% increase in Final Demand in residential

(Rs. lakh)
Type II effects
Output
Original
Increased
Absolute
increase
%
increase
13,74,65,395
13,80,84,862
619468
0.45
1,21,35,201
1,22,23,089
87888
0.72
Fishing
61,09,700
61,38,142
28442
0.47
2,09,50,522
2,12,71,561
321039
1.53
Manufacturing
10,90,36,600
10,97,95,740
759140
0.70
Other Manufacturing
33,71,47,774
33,84,09,657
1261884
0.37
1,57,08,719
1,70,04,646
1295927
8.25
8,51,46,005
8,52,66,740
120735
0.14
Other Construction
4,36,82,177
4,37,44,117
61940
0.14
10
2,65,20,746
2,66,57,598
136852
0.52
11
Trade
11,73,30,313
11,78,14,600
484287
0.41
12
2,66,84,675
2,68,06,975
122300
0.46
13
Railways
96,24,328
96,66,010
41682
0.43
14
8,75,15,741
8,78,97,510
381769
0.44
15
Storage
6,39,577
6,42,122
2545
0.40
16
Communication
1,20,30,753
1,20,78,435
47682
0.40
17
30,44,536
30,60,125
15589
0.51
18

Business Services
7,62,71,845
7,65,55,106
283260
0.37
19
3,94,61,718
3,96,52,315
190598
0.48
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,29,69,569
251448
0.40
1,26,97,87,544
1,27,63,02,019
6514475
0.51
60,91,48,501
61,21,63,773
3015272
0.49
53,55,39,392
54,07,04,180
5164788
0.96
19,34,17,100
19,43,88,799
971698
0.50
2,90,84,726
2,92,37,808
153082
0.53
40
April, 2014
Table 3.4: Sectoral increase (Type II) in various parameters following Simulation 1
(Rs. lakh)
Type I effects
Increase in
Employment
(in number)
Value Added
CoE
Indirect Tax
4,25,832
13,07,293
71830
6559
74,177
8,880
4500
508
Fishing
24,376
8,121
2382
240
2,41,291
48,745
67228
3887
Manufacturing
1,71,806
98,452
30237
27960
Other Manufacturing
2,36,909
1,60,479
60470
48027
5,04,123
30,32,946
348459
32580
42,247
3,156
29200
3229
Other Construction
20,348
32,195
14064
1711
10
54,127
6,557
25034
3288
11
Trade
3,85,762
1,76,700
59981
3633
12
40,299
29,358
11227
1936
13
Railways
25,213
4,645
18067
784
14
1,41,813
80,589
35594
12470
15
Storage
1,507
729
517
45
16
Communication
35,606
7,331
13762
739
17
11,328
3,887
323
218
18

Business Services
2,25,992
19,506
17278
1783
19
1,60,190
19,282
48914
987
20
21
Other Services
1,92,325
1,15,937
112631
2495
30,15,272
51,64,788
9,71,698
1,53,082
Overall
Simulation 2: An increase of Rs. 1 lakh crore in final demand of residential

construction
3.5.
The resultant increase in each parameter is the product of Rs. 1 lakh crore
with the respective multiplier. The impact (Type I and Type II) on output GDP,
employment, household income and tax is presented in Table 3.3 and 3.4 below:
41
April, 2014
Table 3.5: Type I impact of an increase of Rs. 1 lakh crore in Final Demand in
(Rs. lakh)
Type I effects
Output
Absolute
increase
%
increase
Original
Increased
13,74,65,395
13,79,98,378
532983
0.39
1,21,35,201
1,25,86,989
451788
3.72
Fishing
61,09,700
61,11,508
1808
0.03
2,09,50,522
2,21,14,545
1164024
5.56
Manufacturing
10,90,36,600
11,34,14,444
4377844
4.02
Other Manufacturing
33,71,47,774
33,92,10,481
2062707
0.61
1,57,08,719
2,58,44,775
10136056
64.53
8,51,46,005
8,58,83,470
737465
0.87
Other Construction
4,36,82,177
4,40,60,516
378339
0.87
10
2,65,20,746
2,70,13,882
493136
1.86
11
Trade
11,73,30,313
11,86,18,559
1288246
1.10
12
2,66,84,675
2,68,02,764
118089
0.44
13
Railways
14
15
Storage
16
Communication
17
18

Business Services
19
96,24,328
97,06,800
82472
0.86
8,75,15,741
8,81,94,807
679066
0.78
6,39,577
6,46,280
6703
1.05
1,20,30,753
1,20,59,273
28520
0.24
30,44,536
30,59,705
15170
0.50
7,62,71,845
7,64,58,391
186546
0.24
3,94,61,718
3,99,49,806
488089
1.24
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,28,10,813
92692
0.15
1,26,97,87,544
1,29,31,09,285
23321741
1.84
60,91,48,501
61,87,04,460
9555959
1.57
53,55,39,392
56,24,44,782
26905390
5.02
19,34,17,100
19,75,56,614
4139514
2.14
2,90,84,726
2,96,84,355
599628
2.06
42
April, 2014
Table 3.6: Sectoral increase (Type I) in various parameters following

Simulation 2
(Rs. lakh)
Type I effects
Increase in
Employment
(in number)
Value Added
1
Fishing
CoE
Indirect Tax
3,66,381
11,24,781
61802
5644
3,81,309
45,647
23134
2611
1,550
516
151
15
8,74,873
1,76,740
243757
14093
Manufacturing
9,90,781
5,67,755
174373
161244
Other Manufacturing
3,87,258
2,62,324
98846
78506
39,42,984
2,37,22,103
2725459
254826
2,58,051
19,275
178360
19726
Other Construction
1,24,288
1,96,649
85903
10453
10
1,95,044
23,629
90208
11849
11
Trade
10,26,161
4,70,037
159556
9663
12
38,911
28,347
10840
1869
13
Railways
49,886
9,191
35747
1552
14
2,52,248
1,43,347
63313
22182
15
Storage
3,968
1,920
1361
118
16
Communication
21,297
4,385
8231
442
17
11,024
3,782
314
212
18

Business Services
1,48,831
12,846
11379
1174
19
4,10,219
49,379
125260
2528
20
21
Other Services
70,897
42,738
41519
920
95,55,959
2,69,05,390
41,39,514
5,99,628
Overall
43
April, 2014
Table 3.7: Type II impact of an increase of Rs. 1 lakh crore in Final Demand in
(Rs. lakh)
Type II effects
Output
Original
Fishing
Manufacturing
Increased
Absolute
increase
%
increase
13,74,65,395
14,23,29,069
4863674
3.54
1,21,35,201
1,28,25,243
690042
5.69
61,09,700
63,33,007
223307
3.65
2,09,50,522
2,34,71,145
2520623
12.03
10,90,36,600
11,49,96,973
5960373
5.47
Other Manufacturing
33,71,47,774
34,70,55,473
9907699
2.94
1,57,08,719
2,58,83,607
10174888
64.77
8,51,46,005
8,60,93,950
947945
1.11
Other Construction
4,36,82,177
4,41,68,498
486321
1.11
10
2,65,20,746
2,75,95,235
1074489
4.05
11
Trade
11,73,30,313
12,11,32,675
3802361
3.24
12
2,66,84,675
2,76,44,907
960232
3.60
13
Railways
96,24,328
99,51,588
327260
3.40
14
8,75,15,741
9,05,13,188
2997447
3.43
15
Storage
6,39,577
6,59,560
19983
3.12
16
Communication
1,20,30,753
1,24,05,127
374374
3.11
17
30,44,536
31,66,933
122397
4.02
18

Business Services
7,62,71,845
7,84,95,843
2223998
2.92
19
3,94,61,718
4,09,58,186
1496468
3.79
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,46,92,350
1974229
3.15
1,26,97,87,544
1,32,09,35,656
51148112
4.03
60,91,48,501
63,28,22,726
23674225
3.89
53,55,39,392
57,60,90,339
40550947
7.57
19,34,17,100
20,10,46,334
7629234
3.94
2,90,84,726
3,02,86,642
1201915
4.13
44
April, 2014
(Rs. lakh)
Type I effects
Increase in
Value Added
Employment
(in number)
CoE
Indirect Tax
33,43,369
1,02,64,050
563965
51500
5,82,395
69,719
35335
3989
Fishing
1,91,385
63,758
18702
1883
18,94,485
3,82,720
527840
30517
Manufacturing
13,48,934
7,72,990
237407
219531
Other Manufacturing
18,60,098
12,60,006
474784
377084
39,58,090
2,38,12,983
2735900
255802
3,31,701
24,776
229266
25356
Other Construction
1,59,761
2,52,774
110420
13437
10
4,24,980
51,486
196554
25818
11
Trade
30,28,797
13,87,352
470942
28520
12
3,16,404
2,30,505
88147
15199
13
Railways
1,97,954
36,471
141849
6159
14
11,13,442
6,32,743
279466
97911
15
Storage
11,829
5,725
4059
352
16
Communication
2,79,556
57,556
108048
5802
17
88,943
30,518
2533
1712
18

Business Services
17,74,358
1,53,148
135659
13999
19
12,57,722
1,51,394
384044
7752
20
21
Other Services
15,10,023
9,10,275
884313
19589
2,36,74,225
4,05,50,947
76,29,234
12,01,915
Overall
Simulation 3: An increase of Rs. 1 lakh crore in final demand of other

construction
The impact of an increased demand in residential construction was

presented in the previous two simulations, which reflected the backward linkages of
this sector with other sectors of the economy. Conversely, this sector also gets
impacted due to backward linkages of other sectors, say, other construction. The
third simulation assesses the impact of increase of Rs. 1 lakh crore in the final
demand of other construction on the overall economy, and particularly on
residential construction.
3.6.
45
April, 2014
Table 3.9: Type I impact of an increase of Rs. 1 lakh crore in Final Demand in
other construction
(Rs. lakh)
Type II effects
Output
Absolute
increase
%
increase
Original
Increased
13,74,65,395
13,80,51,088
585693
0.43
1,21,35,201
1,26,31,759
496558
4.09
Fishing
61,09,700
61,11,687
1987
0.03
2,09,50,522
2,22,29,700
1279178
6.11
Manufacturing
10,90,36,600
11,38,48,227
4811627
4.41
Other Manufacturing
33,71,47,774
33,94,14,512
2266738
0.67
1,57,08,719
1,58,58,263
149544
0.95
8,51,46,005
8,59,56,580
810576
0.95
Other Construction
4,36,82,177
5,40,98,024
10415847
23.84
10
2,65,20,746
2,70,62,727
541981
2.04
11
Trade
11,73,30,313
11,87,46,110
1415797
1.21
12
2,66,84,675
2,68,14,456
129781
0.49
13
Railways
96,24,328
97,14,964
90636
0.94
14
8,75,15,741
8,82,62,037
746296
0.85
15
Storage
6,39,577
6,46,943
7366
1.15
16
Communication
1,20,30,753
1,20,62,095
31342
0.26
17
30,44,536
30,61,209
16674
0.55
18

Business Services
7,62,71,845
7,64,76,862
205017
0.27
19
3,94,61,718
3,99,98,140
536422
1.36
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,28,19,981
101860
0.16
1,26,97,87,544
1,29,44,28,464
24640920
1.94
60,91,48,501
61,86,60,487
9511986
1.56
53,55,39,392
54,45,85,436
9046044
1.69
19,34,17,100
19,72,81,902
3864802
2.00
2,90,84,726
2,97,43,727
659001
2.27
46
April, 2014
Table 3.10: Sectoral increase (Type I) in various parameters following Simulation 3

(Rs. lakh)
Type I effects
Increase in
Employment
(in number)
Value Added
CoE
Indirect Tax
4,02,615
12,36,017
67914
6202
4,19,095
50,170
25427
2870
Fishing
1,703
567
166
17
9,61,422
1,94,224
267871
15487
Manufacturing
10,88,953
6,24,012
191651
177221
Other Manufacturing
4,25,563
2,88,271
108624
86271
58,174
3,49,989
40211
3760
2,83,634
21,186
196042
21682
Other Construction
34,21,692
54,13,830
2364936
287782
10
2,14,363
25,970
99143
13023
11
Trade
11,27,762
5,16,576
175354
10620
12
42,764
31,154
11914
2054
13
Railways
14
15
Storage
16
54,824
10,101
39285
1706
2,77,222
1,57,539
69581
24378
4,361
2,110
1496
130
Communication
23,404
4,818
9046
486
17
12,117
4,157
345
233
18

Business Services
1,63,567
14,118
12506
1291
19
4,50,842
54,269
137664
2779
20
21
Other Services
77,910
46,966
45626
1011
95,11,986
90,46,044
38,64,802
6,59,001
Overall
47
April, 2014
Table 3.11: Type II impact of an increase of Rs. 1 lakh crore in Final Demand in
other construction
(Rs. lakh)
Type II effects
Output
Original
Increased
Absolute
increase
%
increase
Fishing
61,09,700
63,18,486
208786
3.42
2,09,50,522
2,34,96,271
2545749
12.15
Manufacturing
10,90,36,600
11,53,25,734
6289134
5.77
13,74,65,395
14,20,94,379
4628984
3.37
1,21,35,201
1,28,54,202
719001
5.92
Other Manufacturing
33,71,47,774
34,67,38,884
9591110
2.84
1,57,08,719
1,58,94,518
185799
1.18
8,51,46,005
8,61,53,092
1007088
1.18
Other Construction
4,36,82,177
5,41,98,840
10516663
24.08
10
2,65,20,746
2,76,05,500
1084754
4.09
11
Trade
11,73,30,313
12,10,93,380
3763067
3.21
12
2,66,84,675
2,76,00,712
916037
3.43
13
Railways
96,24,328
99,43,508
319180
3.32
14
8,75,15,741
9,04,26,562
2910821
3.33
15
Storage
6,39,577
6,59,343
19766
3.09
16
Communication
1,20,30,753
1,23,84,997
354244
2.94
17
30,44,536
31,61,321
116785
3.84
18

Business Services
7,62,71,845
7,83,79,102
2107257
2.76
19
3,94,61,718
4,09,39,600
1477882
3.75
20

defence
4,05,63,100
4,05,63,100
0.00
21
Other Services
6,27,18,121
6,45,76,653
1858532
2.96
1,26,97,87,544
1,32,04,08,181
50620637
3.99
60,91,48,501
63,18,41,816
22693315
3.73
53,55,39,392
55,73,25,426
21786035
4.07
19,34,17,100
20,05,40,032
7122932
3.68
2,90,84,726
3,03,06,044
1221318
4.20
48
April, 2014
(Rs. lakh)
Type I effects
Increase in
Employment
(in number)
Value Added
CoE
Indirect Tax
31,82,040
97,68,773
536752
49015
6,06,836
72,645
36817
4156
Fishing
1,78,940
59,612
17486
1761
19,13,369
3,86,535
533102
30821
Manufacturing
14,23,338
8,15,627
250502
231640
Other Manufacturing
18,00,660
12,19,744
459613
365035
72,277
4,34,838
49959
4671
3,52,396
26,322
243570
26938
Other Construction
34,54,811
54,66,231
2387826
290568
10
4,29,039
51,978
198432
26065
11
Trade
29,97,496
13,73,015
466075
28226
12
3,01,841
2,19,896
84090
14499
13
Railways
1,93,067
35,571
138346
6007
14
10,81,263
6,14,456
271389
95082
15
Storage
11,700
5,662
4014
349
16
Communication
2,64,524
54,461
102239
5490
17
84,865
29,118
2417
1633
18

Business Services
16,81,219
1,45,109
128539
13264
19
12,42,101
1,49,514
379274
7656
20
21
Other Services
14,21,530
8,56,929
832489
18441
2,26,93,315
2,17,86,035
71,22,932
12,21,318
Overall
49
April, 2014
50
4.
April, 2014
SUMMARY OF FINDINGS
4.1.
The present study attempts to update and build on the findings of the July
2000 study carried out by IIM, Ahmedabad for HUDCO. In fact, this study is not just
an update but a refinement, to the extent possible, of the July 2000 study. While in
both the studies, the input-output model was used to study the impact of
investment/expenditure in housing sector on GDP and employment, there are
notable differences in the framework and methodology. These differences are
presented in the table below:
Table 4.1: Salient features of previous and present studies

July 2000 Study
Present Study (Feb 2014)
Reference year
Used Planning Commission IO

table of 1996-97
Number of Sectors
Original Table of 65 X 65 sector

aggregated to 14 broad sectors
Additional sectors
None
Used CSO IO table of 2007-08,

updated for 2009-10
Original Table of 130 X 130
sector aggregated to 21 broad
sectors
Construction sector split into:
Non-residential
Construction
Other Construction
Housing sector
Aggregate Construction Sector
Employment
Overall employment by sectors
Residential Construction sector

Overall employment by sectors
with formal-informal breakup
IO Coefficient
matrix
Based on Domestic
Transactions Matrix
(discounting imported inputs)
Based on Total Transactions

Matrix (including imported
inputs)
Multipliers
Type I and Type II Output,

employment and income
multipliers computed
Type I and Type II Output,

employment (both formal and
informal), income and indirect
tax multipliers computed
4.2.
The present study assesses the impact of housing investment or housing
expenditure on GDP, employment, income generation and tax collection, through
various multipliers. Given the highly informal-labour extensive nature of the housing
sector, informal labour coefficients and its multipliers have also been computed.
4.3.
The study assesses the inter-linkages between housing, construction,
construction materials and real estate development sectors as these sectors have
51
April, 2014
been kept separately in the aggregated IO table. The residential construction refers
broadly to the housing sector. Besides, non-residential construction and other
construction represent the remaining part of the Construction sector. The linkages
with construction material and real estate development sectors can be assessed by
the derived linkage coefficients of Construction related manufacturing and real
estate services sectors respectively. The policy interventions have been studied
though the following simulations:
Impact of a 10% increase in final demand of residential construction

sector on the output of other sectors and on the economy as a whole
Impact of an increase of Rs. 1 lakh crore in final demand of residential

construction sector on the output of other sectors and on the economy
as a whole
Impact of an increase of Rs. 1 lakh crore in final demand of other

construction sector on the output of residential construction and other
sectors and on the economy as a whole
4.4.
The report is organised in four chapters. The overview of the housing sector,
the objectives of the present study and the key takeaways are presented in Chapter 1.
Chapter 2 is devoted to the methodology adopted and the description of the data
sources used for the present study. The IO model, multipliers and multiplier analysis
to carry out policy simulations are also described and presented in this chapter. In
Chapter 3, the policy interventions based on several simulations have been depicted.
The present chapter, Chapter 4, presents the key findings of the study.
Key Findings
4.5.
The housing sector (residential construction) accounts for 1.24 per cent of
the total output of the economy. Its share in the GDP is 1.00 per cent and in
employment is 6.86 per cent making this sector the fourth largest employment
generating sector. 99.41 per cent of the jobs in housing sector are presently informal
jobs.
4.6.
The sectors capital to output ratio is 0.61 which means that 0.61 units of
capital produces 100 units of output. Its labour to output ratio, number of persons
employed to produce a lakh unit of output, is 2.34 and is the highest among all the
sectors.
52
April, 2014
4.7.
The Type I output multiplier (capturing the direct and indirect effects) of the
housing sector is 2.33 and Type II output multiplier (capturing the direct, indirect
and induced effects) is 5.11. Hence, a unit increase in final demand for this sector is
expected to result in an overall increase in the economys output by 2.33 units, when
direct and indirect linkages are taken into account. With induced linkages added, the
economys output is expected to increase by 5.11 units.
4.8.
Of the total increase of 2.33 units, an increase of 1.01 units is expected in the
sectors own output. Besides other sectors get a boost, like output of construction
related manufacturing increases by 0.44 units and real estate services increases by
0.0015 units. Similarly, owing to Type II effect, an increase of 1.02 units is likely to
happen in the sectors own output while construction related manufacturing
increases by 0.60 units and real estate services increases by 0.0122 units.
4.9.
The Type I employment linkage coefficient of the housing sector is 2.69,
informal employment linkage coefficient being 2.65. Hence, 2.69 new jobs (2.65
informal and 0.4 formal) are created in the economy as the final demand of housing
sector increases by Rs. 1 lakh. Type II employment linkage coefficient is 4.06, of
which informal coefficient is 3.95.
4.10. Type I income and tax linkage coefficients of the housing sector are 0.41 and
0.06 respectively. This means that a unit increase in the final demand of this sector
results in an increase in household income by 0.41 units and in indirect tax by 0.06
units, owing to the direct and indirect linkages of the sector with other sectors of the
economy.
4.11. Type II income and tax linkage coefficients of the housing sector are 0.76 and
0.12 respectively. This means that with induced effects added, a unit increase in the
final demand of this sector results in an increase in household income by 0.76 units
and in indirect tax by 0.12 units.
4.12. As a concluding note, it is important to mention that IO models provide an
estimate of additional output that can be generated for a given amount of demand for
the goods and services produced by any sector but do not reflect the possible supply
constraints. The inputs required for generating the extra output are assumed to be
forthcoming through extra production by the input producers. If there are
constraints in this chain, then for meeting the fresh demand new production
capacities would have to be developed or supply sources established. This applies to
the additional demand created by residential construction as well. While the IO
multipliers assume that the industries linked with the residential construction will
produce the extra output that is required to meet the demand generated by the
housing construction but any supply constraints in this will constrain the output of
53
April, 2014
the housing construction output also. This feature of the I-O model draws attention to
the need for steps to ensure that the industries supporting housing development also
develop for a balanced development.
54
April, 2014
Appendices
55
April, 2014
56
April, 2014
Appendix 1: Aggregating 130 sectors of IO table to 21 sectors

130 sectorsCSO table
Description
21 sectorshousing Description
study
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Paddy
Wheat
Jowar
Bajra
Maize
Gram
Pulses
Sugarcane
Groundnut
Coconut
Other oilseeds
Jute
Cotton
Tea
Coffee
Rubber
Tobacco
Fruits
Vegetables
Other crops
Milk and milk products
Animal services(agricultural)
Poultry & Eggs
Other liv.st. produ.
Forestry and logging
Fishing
Coal and lignite
Natural gas
Crude petroleum
Iron ore
Manganese ore
Bauxite
Copper ore
Other metallic minerals
Lime stone
Mica
Other non-metallic minerals
38
Sugar
39
Khandsari, boora
40
41
Hydrogenated oil(vanaspati)
Edible oils other than vanaspati
Agriculture incl. Livestock (1 to 24)
2
3
Forestry and logging (25)

Fishing (26)
Mining and quarrying (27 to 37)
construction related manufacturing

(55,56,62,64,69,74 to 77,79 to 82, 89)
other manufacturing (38 to 54, 57 to 61, 63,
65 to 68, 70 to 73, 78, 83 to 88, 90 to 105)
57

42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
Description
April, 2014
study
Tea and coffee processing

Miscellaneous food products
Beverages
Tobacco products
Khadi, cotton textiles(handlooms)
Cotton textiles
Woollen textiles
Silk textiles
Art silk, synthetic fibre textiles
Jute, hemp, Mesta textiles
Carpet weaving
Readymade garments
Miscellaneous textile products
Furniture and fixtures-wooden
Wood and wood products
Paper, paper prods. & newsprint
Printing and publishing
Leather footwear
Leather and leather products
Rubber products
Plastic products
Petroleum products
Coal tar products
Inorganic heavy chemicals
Organic heavy chemicals
Fertilizers
Pesticides
Paints, varnishes and lacquers
Drugs and medicines
Soaps, cosmetics & glycerine
Synthetic fibres, resin
Other chemicals
Structural clay products
Cement
Other non-metallic mineral prods.
Iron, steel and Ferro alloys
Iron and steel casting & forging
Iron and steel foundries
Non-ferrous basic metals
Hand tools, hardware
Miscellaneous metal products
Tractors and agri. implements
Industrial machinery(F & T)
Industrial machinery(others)
58

86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
Description
103
104
105
106
Machine tools
Other non-electrical machinery
Electrical industrial Machinery
Electrical wires & cables
Batteries
Electrical appliances
Communication equipments
Other electrical Machinery
Electronic equipments(incl.TV)
Ships and boats
Rail equipments
Motor vehicles
Motor cycles and scooters
Bicycles, cycle-rickshaw
Other transport equipments
Watches and clocks
Medical, precision & optical
instruments
Gems & jewellery
Aircraft & spacecraft
Miscellaneous manufacturing
Construction
107
Electricity
108
109
110
111
112
113
Water supply
Railway transport services
Land tpt including via pipeline
Water transport
Air transport
Supporting and aux. tpt activities
114
115
116
117
118
119
102
April, 2014
study
7
8
9
Other Construction
10
Electricity, Water Supply (gas will be in Sector

1 (gobar gas) and sector 6 (LPG)) - 107, 108
13
Railways (109)
14
Transport by other means (110 to 113)
Storage and warehousing

Communication
Trade
Hotels and restaurants
Banking
Insurance
15
16
11
12
Storage (114)
communication (115)
Trade (116)
Hotel and Restaurants (117)
19
banking and insurance (118, 119)
120
Ownership of dwellings
18
ownership of dwellings and other business

services (120, 123, 124, 125, 127)
121
122
123
124
Education and research

Medical and health
Business services
Computer & related activities
59

125
126
127
128
129
130
Description
Legal services
Real estate activities
Renting of machinery & equipment
O.com, social & personal services
Other services
Public administration
April, 2014
study
17
21
real estate services (126)

other services (121, 122, 128, 129)
20
Public administration and defence (130)
60
April, 2014
APPENDIX 2: About Input-Output Table

Input-Output (IO) Table is the matrix representation of a nations economy,
and is used to analyse the inter-industry relations in an economy, depicting how the
output of one industry is used as input in other industries, thereby making each
industry dependent on other industries both as the user and as supplier. The credit of
the development of this analysis goes to Wassily Leontief (1906-1999) who won the
Nobel Prize in Economics for his work in this area7.
The standard IO table can be viewed as consisting of four major components
(also known as blocks or quadrants). The schematic structure of a standard IO
structure is given in the Table below:
Schematic structure of a standard IO Table

Sectors
Sectors
Final
Payments
Sectors
Total
Final demand
Sectors
Total
Block A
Inter-sector
Transactions
Block B
Final demand
(sales to
households,
visitors,
government,
investment, and
exports)
Total sector
output
(sales)
Block C
Primary payments
(payments for labour,
capital, land,
loans, taxes, and
imported goods)
Block D
Primary Inputs to
Final Demand sectors
Total
payments
Total sector input

(purchases)
Total
Expenditures
Wassily Leontief (August 5, 1905, Munich, Germany February 5, 1999, New York) was an economist notable for his
research on development of the linear activity model of General Equilibrium and the use of input-output analysis that results
from it.
61
April, 2014
Each of these blocks consists of a series of rows and columns. The rows
represent the producing sectors that are used as the inputs in other sectors, while the
columns represent the purchasing sectors. These blocks are briefly described as
follows:
Block A
Block A presents the inter-sector transactions showing the intermediate sales
and purchases of goods and services among the production sectors of an economy.
The rows of this block depict the value of each sectors output being demanded by
other sectors as the inputs in their production process. And the columns give the
inputs that the sector purchases from other sectors.
Block B
This block, also called the block of final demand, shows the sales of goods and
services from row sectors to the final users, that is, users other than the producing
sectors. This derives from the fact that besides the use as inputs in other sectors, the
produce of all the sectors is also demanded by the final consumers, which comprise of
Households for their private consumption (termed as Private Final

Consumption Expenditure, PFCE);
Government units (as Government Final Consumption Expenditure, GFCE);
Investment demand (sectors demanded as the capital investment and for
addition of stock of inventories, termed as Gross Fixed Capital Formation,
GFCF and Changes in Stocks, CIS respectively)
Net Exports (the produce of sectors meant for export to other nations net of
imports).
Block C
This block is also termed as the block of primary inputs, and lies below Block
A. This block gives the cost of production of a sector other than the cost of inputs
from other sectors (given in Block A). This block together with the block A gives the
total cost of production of each sector. The primary inputs presented in this block are
the payments to the factor owners in the form of salaries and wages, and interest
payments and operating surplus. These are the land, labour and capital costs of a
production process. Other primary inputs are the indirect tax payments to the
government. The last two rows of this block are Gross Value Added and the Total
Value of Output for each sector.
62
April, 2014
Block D
This block is an intersection of Block C and Block B and records the applicable
primary inputs into final demand components. This block lies below Block B.
An increased activity in any sector amounts to the generation of additional

output, value added and employment in the direct recipient sectors, but apart from
this direct impact, further increase is generated in other sectors of the economy due
to inter-industry relationships. Such direct and indirect impacts can be measured by
using Input-Output techniques. Input-Output analysis is a powerful econometric tool
to study the extent and pattern of inter-industry dependence and assess the
multiplier effect of increased activity in one sector on the economy as a whole. The
major advantage of this technique is that it concentrates on the links between various
economic activities operating in an economy. An input-output table is a worthwhile
system of accounting as a powerful model can be derived from it using the simple
assumptions. It assumes that the inputs used in producing a product are related to
the industry output by a linear and fixed coefficient production function.
63
April, 2014
64
April, 2014
APPENDIX 3: Input-Output Table, 2009-10 (Rs. Lakh)
S. No.
Industry
Agriculture
incl.
Livestock
Forestry
and
Logging
Fishing
Mining
and
Quarrying
Construction
related
Manufacturing
Other
Manufacturing
Residential
Construction
NonResidential
Construction
17,349,954
3,833
158
1,510,698
34,220,001
131,099
755,847
61,298
115,265
686
2,544,145
1,361,795
465,703
2,685,882
Fishing
10,945
131,042
6,715
220,121
26
1,935,103
176,344
14,825,142
40,759,567
303,703
1,750,804
1,191,647
17,637
10,898
190,382
24,582,181
27,117,146
4,387,626
25,304,949
Other Manufacturing
10,542,451
575,903
520,540
2,028,322
17,113,159
90,592,655
371,328
2,140,429
84,640
10,349
39,766
100,611
304,690
169,969
980,305
458,773
56,097
215,544
545,341
1,651,510
921,281
5,313,547
Other Construction
235,363
28,779
110,580
279,774
847,269
472,642
2,725,992
10
1,050,591
12,421
382,699
2,077,837
5,353,634
332,483
1,917,517
11
Trade
5,597,873
105,802
108,957
319,382
8,941,466
29,788,744
849,795
4,900,740
12
7,835
207,008
140,826
130
4,334
5,340
30,797
13
Railways
309,695
20,458
5,707
126,951
561,144
1,871,411
44,848
258,632
14
2,404,572
461,385
48,683
342,551
4,584,144
15,115,938
373,591
2,154,452
15
Storage
5,785
16
Communication
58,038
23,553
10,679
117,858
1,004,987
4,463
25,730
17
397
45
17,533
101,125
18
Ownership of Dwelling & Business

Services
196,201
87,537
267,028
600,947
3,772,014
103,903
599,224
19
1,740,274
6,642
7,675
359,375
1,962,407
9,204,306
307,480
1,773,284
20
21
Other Services
168,631
106,434
324,440
735,815
3,285,928
7,738
44,583
65
April, 2014
APPENDIX 3: Input-Output Table, 2009-10 (Rs. Lakh) (cont.)

S.
No.
Industry
22
IC at factor cost
23
Agriculture
incl.
Livestock
Forestry
and
Logging
Fishing
Mining
and
Quarrying
Construction
related
Manufacturing
Other
Manufacturing
Residential
Construction
NonResidential
Construction
43,404,282
1,839,103
833,501
5,041,498
81,089,516
266,476,095
9,270,530
53,463,866
Indirect taxes
1,455,594
70,146
51,526
253,643
4,016,016
12,831,749
394,926
2,277,537
24
Subsidies
1,890,440
16,150
11,627
90,904
745,779
5,457,089
67,519
389,359
25
IC at market prices
42,969,435
1,893,099
873,400
5,204,237
84,359,752
273,850,755
9,597,937
55,352,043
26
Gross value added at factor

cost
94,495,959
10,242,102
5,236,300
15,746,285
24,676,848
63,297,019
6,110,782
29,793,961
27
CoE
15,939,738
621,400
511,700
4,387,219
4,343,025
16,156,360
4,223,878
20,593,062
28
OS/MI
71,251,016
9,485,001
3,967,700
7,684,296
13,847,176
32,798,596
1,561,870
7,615,728
29
CFC
7,305,205
135,701
756,900
3,674,770
6,486,646
14,342,062
325,034
1,585,171
30
Gross output at factor cost
137,465,395
12,135,201
6,109,700
20,950,522
109,036,600
337,147,774
15,708,719
85,146,005
31
Employment (lakh)
2,901.00
12.26
17.44
31.81
141.41
428.77
75.02
365.76
32
GFCF (Rs. Lakh)
180,473
1,438
11,949
81,138
166,983
419,189
11,177
54,503
33
NCS (Rs. Lakh)
1,941,986
31,665
61,469
582,026
1,501,290
3,788,195
95,984
468,081
34
Formal employment (lakh)
3.07
0.63
0.31
9.29
11.72
44.89
2.17
0.48
35
Infl. Employment (lakh)
2897.93
11.63
17.14
22.52
129.69
383.87
365.47
21.78
36
Total employment (lakh)
2901.00
12.26
17.44
31.81
141.41
428.77
367.64
22.25
37
Indirect taxes net of subsidies
-434846
53996
39899
162739
3270237
7374660
327407
1888177
66
April, 2014

S. No.
Industry
Fishing
Other
Construction
Electricity,
Water Supply
Trade
Hotel and
Restaurants
Railways
Transport
by Other
Means
Storage
Communication
10
11
12
13
14
15
16
400,483
33,764
596,145
11,036,013
5,671,415
1,423,342
5,567
50,087
48
14
159
3,708
14,190
927,611
3,959,846
833,932
2,119
15,361
18
13,409,938
255,697
1,790,850
76,131
2,390
1,704,743
15,750
75,329
1,133,981
3,810,762
4,800,016
2,785,490
1,543,092
26,060,345
70,474
1,731,011
519,506
53,396
68,605
14,043
73,506
76,337
2,350
14,162
Other Manufacturing
2,815,880
289,421
371,859
76,118
398,426
413,771
12,737
76,762
Other Construction
1,444,621
148,481
190,773
39,051
204,403
212,275
6,535
39,381
10
1,016,148
4,160,229
948,345
72,721
801,998
566,643
90,234
237,861
11
Trade
2,596,982
1,164,840
1,149,974
2,753,043
204,186
4,860,723
11,408
236,510
12
16,321
151,539
1,820,879
264,164
14,414
6,981,403
8,925
37,717
13
Railways
137,052
68,105
76,899
145,166
14,749
286,524
2,246
25,177
14
1,141,669
584,783
3,695,634
1,114,232
99,150
2,604,686
10,352
170,572
15
Storage
572,755
518
11,643
16
Communication
13,633
65,930
157,035
6,026
3,925
423,131
38,609
17
53,591
3,717
2,733
18

Services
317,543
45,615
1,163,026
13,594
101,052
2,037,537
13,675
42,304
19
939,708
1,131,494
4,898,771
97,184
140,351
1,017,768
15,655
32,827
20
21
Other Services
23,613
63,298
76,635
16,842
135,322
260,558
2,034
163,637
67
April, 2014
S. No.
Industry
22
IC at factor cost
23
Indirect taxes
24
Subsidies
25
Other
Construction
Electricity,
Water Supply
Trade
Hotel and
Restaurants
Railways
Transport
by Other
Means
Storage
Communication
10
11
12
13
14
15
16
28,331,636
15,992,926
23,265,930
18,526,644
3,752,374
53,193,239
262,382
2,924,592
1,206,907
637,250
880,063
422,376
181,131
2,858,693
11,281
186,459
206,322
598,859
275,938
1,057,145
130,776
1,045,091
12,691
63,998
IC at market prices
29,332,220
16,031,317
23,870,054
17,891,875
3,802,728
55,006,841
260,972
3,047,053
26
Gross value added at factor cost
14,349,956
10,489,429
93,460,259
8,792,800
5,821,600
32,508,900
378,605
8,983,700
27
CoE
9,918,114
4,851,387
14,531,960
2,449,600
4,171,600
8,159,500
129,901
3,472,200
28
OS/MI
3,668,230
653,054
76,235,710
5,605,000
523,200
21,432,000
219,003
3,791,100
29
CFC
763,613
4,984,988
2,692,589
738,200
1,126,800
2,917,400
29,701
1,720,400
30
43,682,177
26,520,746
117,330,313
26,684,675
9,624,328
87,515,741
639,577
12,030,753
31
Employment (lakh)
176.16
12.71
428.10
64.06
10.73
184.74
1.83
18.50
32
GFCF (Rs. Lakh)
26,254
130,537
138,800
30,671
31,929
59,212
1,789
74,895
33
NCS (Rs. Lakh)
225,476
1,297,284
1,284,392
214,713
322,435
446,096
21,489
383,500
34
5.95
9.74
9.68
1.66
9.39
11.39
0.79
9.91
35
221.09
2.97
418.42
62.39
1.34
173.35
1.05
8.59
36
227.05
12.71
428.10
64.06
10.73
184.74
1.83
18.50
37
1000584
38391
604125
-634768
50355
1813602
-1410
122461
68
April, 2014
S. No.
Industry
Real Estate
Services
Ownership
of Dwelling
& Business
Services
Banking and
Insurance
Public
administration
and defence
Other
Services
IC
PFCE
GFCE
17
18
19
20
21
22
23
24
1,363
41,188
545,631
72,297,597
61,683,993
1,543,887
203
138
8,714,159
3,876,037
60
Fishing
42
386,973
5,340,469
40
8,731
3,272
65,501,597
197,558
89,673
17,477
409,245
187,085
623,461
101,370,563
7,820,656
537,425
11,037
1,438,770
962,592
4,461,708
172,694,066
94,654,114
7,485,338
Other Manufacturing
172
265,707
58,453
70,868
2,907,434
64,761
98,759
933
1,440,212
316,834
384,127
15,759,172
351,024
535,303
Other Construction
479
738,867
162,544
197,067
8,084,876
180,084
274,625
10
1,611
1,113,940
587,419
234,047
20,958,379
3,819,316
1,743,027
11
Trade
4,190
255,456
151,869
787,705
64,789,643
29,280,691
1,398,654
12
150,711
1,533,083
1,077,950
1,590,785
14,044,160
11,907,744
732,772
13
Railways
219
55,021
138,197
52,733
4,200,936
3,812,346
466,024
14
1,767
305,787
585,790
960,745
36,760,484
38,698,833
3,575,339
15
Storage
590,701
7,818
41,059
16
Communication
9,539
174,542
444,395
248,390
2,830,463
7,008,420
1,350,404
17
298,970
404,499
882,612
2,161,924
18

Services
228,127
4,061,074
216,465
781,833
14,648,699
42,676,346
1,790,459
19
8,271
1,272,871
1,150,890
1,443,749
27,510,981
10,346,188
1,458,546
20
40,563,100
21
Other Services
56,730
1,633,457
160,294
1,944,936
9,210,926
41,553,905
11,961,829
69
April, 2014
S. No.
Industry
22
IC at factor cost
23
Indirect taxes
24
Subsidies
25
IC at market prices
26
27
CoE
28
OS/MI
29
CFC
30
31
Employment (lakh)
32
GFCF (Rs. Lakh)
33
NCS (Rs. Lakh)
34
Real Estate
Services
Ownership
of Dwelling
& Business
Services
Banking and
Insurance
Public
administration
and defence
Other
Services
IC
PFCE
GFCE
17
18
19
20
21
22
23
24
791,636
15,152,694
6,200,777
14,331,201
644,144,421
365,442,225
75,646,283
42,576
480,103
204,426
622,325
29,084,726
14,329,653
2,572,810
2,074
212,432
109,486
206,425
12,590,105
8,970,977
791,893
832,138
15,420,365
6,295,718
14,747,102
660,639,043
370,800,900
77,427,200
2,212,398
60,851,480
33,166,000
40,563,100
47,971,019
609,148,501
63,005
4,652,432
10,127,200
36,020,600
28,093,219
193,417,100
2,029,678
48,396,198
22,520,900
16,656,144
349,941,601
119,715
7,802,850
517,900
4,542,500
3,221,656
65,789,800
3,044,536
76,271,845
39,461,718
40,563,100
62,718,121
1,269,787,544
7.59
52.52
39.92
95.89
289.18
5,355.39
10,673
293,580
9,757
208,938
129,164
2,073,048
116,810
3,212,924
137,428
2,293,741
1,025,158
19,452,142
0.44
17.04
24.03
93.45
92.05
358.05
35
7.15
35.48
15.90
2.44
197.13
4997.34
36
7.59
52.52
39.92
95.89
289.18
5355.39
37
40502
267671
94941
415900
70
April, 2014

S. No.
Industry
GFCF
Val
CIS
EXP
IMP
FU
Total
25
26
27
28
29
30
31
270,971
1,121,659
2,656,883
2,109,589
65,167,804
137,465,401
68,546
180,298
703,899
3,421,043
12,135,202
Fishing
30,807
378,860
27,409
5,722,727
6,109,700
-1,614,972
9,793,501
53,016,833
-44,551,074
20,950,523
12,691,177
3,766,359
7,341,708
24,491,291
7,666,034
109,036,597
Other Manufacturing
57,112,553
9,174,363
10,361,453
47,349,254
61,683,376
164,453,698
337,147,764
12,607,111
61,912
31,258
12,801,285
15,708,719
68,334,352
335,580
169,426
69,386,833
85,146,005
Other Construction
35,057,349
172,162
86,920
35,597,300
43,682,177
23
5,562,366
26,520,746
9,291,969
1,197,551
1,893,128
9,478,676
52,540,670
117,330,313
12,640,516
26,684,675
486,682
62,724
99,156
496,461
5,423,393
9,624,328
3,727,377
480,385
759,409
9,153,714
5,639,800
50,755,256
87,515,740
10
11
Trade
12
13
Railways
14
15
Storage
48,876
639,577
16
Communication
1,191,629
350,163
9,200,290
12,030,753
17
2,161,924
3,044,536
18

Services
1,914,040
30,472,657
15,230,355
61,623,147
76,271,846
19
756,203
610,200
11,950,737
39,461,718
20
40,563,100
40,563,100
21
Other Services
6,480,944
6,489,482
53,507,195
62,718,121
71
April, 2014

S. No.
Industry
22
IC at factor cost
23
GFCF
Val
CIS
EXP
IMP
FU
Total
25
26
27
28
29
30
31
201,493,580
10,915,022
16,485,546
126,300,466
Indirect taxes
6,895,665
869,030
1,224,378
24
Subsidies
1,084,446
152,852
25
IC at market prices
207,304,800
11,631,200
26
27
CoE
28
OS/MI
29
CFC
30
31
Employment (lakh)
32
GFCF (Rs. Lakh)
33
NCS (Rs. Lakh)
34
35
36
37
625,643,122
1,269,787,543
6,722,437
32,613,973
61,698,699
278,924
1,242,903
12,521,995
25,112,100
17,430,999
131,780,000
645,735,100
1,306,374,143
72
170,640,000
170,640,000
April, 2014
APPENDIX 4: Leontief Inverse Matrix for Direct and Indirect linkages
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Ownership of Dwelling & Business Services
Other Services
Output multipliers
Agriculture
incl.
Livestock
Forestry
and
Logging
Fishing
Mining
and
Quarrying
Construction
related
Manufacturing
Other
Manufacturing
Residential
Construction
1.1698
0.0025
0.0002
0.0452
0.0381
0.1628
0.0013
0.0073
0.0037
0.0179
0.0709
0.0055
0.0044
0.0350
0.0004
0.0017
0.0001
0.0065
0.0262
0.0000
0.0047
1.6042
0.0276
1.0109
0.0001
0.0173
0.0202
0.1043
0.0013
0.0073
0.0037
0.0061
0.0277
0.0227
0.0030
0.0488
0.0001
0.0028
0.0001
0.0112
0.0074
0.0000
0.0112
1.3337
0.0194
0.0012
1.0220
0.0211
0.0199
0.1402
0.0003
0.0018
0.0009
0.0048
0.0355
0.0026
0.0022
0.0181
0.0002
0.0007
0.0000
0.0031
0.0084
0.0000
0.0022
1.3046
0.0308
0.0027
0.0001
1.0425
0.0441
0.1810
0.0028
0.0153
0.0079
0.0306
0.0438
0.0124
0.0081
0.0328
0.0005
0.0019
0.0001
0.0186
0.0299
0.0000
0.0198
1.5257
73
0.0840
0.0346
0.0004
0.2454
1.3547
0.4027
0.0031
0.0165
0.0085
0.0503
0.1673
0.0152
0.0119
0.0937
0.0009
0.0045
0.0002
0.0215
0.0541
0.0000
0.0193
2.5887
0.1964
0.0116
0.0011
0.2227
0.1817
1.5277
0.0030
0.0165
0.0084
0.0460
0.1747
0.0155
0.0122
0.0960
0.0009
0.0067
0.0002
0.0279
0.0654
0.0000
0.0223
2.6369
0.0533
0.0452
0.0002
0.1164
0.4378
0.2063
1.0136
0.0737
0.0378
0.0493
0.1288
0.0118
0.0082
0.0679
0.0007
0.0029
0.0015
0.0187
0.0488
0.0000
0.0093
2.3322
April, 2014
APPENDIX 4: Leontief Inverse Matrix for Direct and Indirect linkages (cont.)
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Other Services
Output multipliers
NonResidential
Construction
Other
Construction
Electricity,
Water
Supply
Trade
Hotel and
Restaurants
Railways
Transport
by Other
Means
10
11
12
13
14
0.0448
0.0058
0.0002
0.0681
0.0715
0.3003
0.0097
0.0524
0.0269
0.1131
0.0710
0.0090
1.0051
0.0384
0.0004
0.0026
0.0002
0.0192
0.0379
0.0000
0.0204
1.8970
0.1870
0.0053
0.0004
0.0858
0.0977
0.5246
0.0025
0.0137
0.0070
0.0288
0.1373
0.0919
0.0088
1.0751
0.0008
0.0079
0.0003
0.0370
0.0425
0.0000
0.0124
2.3670
0.0567
0.0481
0.0002
0.1238
0.4658
0.2195
0.0145
1.0785
0.0403
0.0525
0.1371
0.0126
0.0088
0.0723
0.0007
0.0030
0.0016
0.0198
0.0519
0.0000
0.0099
2.4174
0.0586
0.0497
0.0002
0.1279
0.4812
0.2267
0.0150
0.0811
1.0416
0.0542
0.1416
0.0130
0.0091
0.0746
0.0007
0.0031
0.0017
0.0205
0.0536
0.0000
0.0102
2.4641
0.0547
0.0045
0.0002
0.2335
0.0711
0.3286
0.0041
0.0220
0.0113
1.2045
0.1025
0.0175
0.0076
0.0574
0.0006
0.0056
0.0001
0.0132
0.0749
0.0000
0.0117
2.2257
74
0.0321
0.0021
0.0001
0.0281
0.0378
0.1016
0.0012
0.0064
0.0033
0.0165
1.0304
0.0219
0.0022
0.0436
0.0050
0.0026
0.0001
0.0143
0.0508
0.0000
0.0033
1.4037
0.5216
0.0031
0.0008
0.0514
0.0501
0.2671
0.0018
0.0098
0.0050
0.0197
0.1632
1.0204
0.0094
0.0757
0.0008
0.0024
0.0001
0.0096
0.0296
0.0000
0.0061
2.2477
April, 2014
APPENDIX 4: Leontief Inverse Matrix for Direct and Indirect linkages (cont.)
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Other Services
Output multipliers
Storage
Communication
Real
Estate
Services
15
16
17
0.0456
0.0047
0.0002
0.0714
0.0838
0.2506
0.0054
0.0294
0.0151
0.1805
0.0667
0.0225
0.0070
0.0438
1.0004
0.0023
0.0002
0.0301
0.0490
0.0000
0.0093
1.9180
0.0364
0.0027
0.0002
0.0422
0.0444
0.2452
0.0020
0.0109
0.0056
0.0328
0.0534
0.0084
0.0045
0.0334
0.0003
1.0047
0.0003
0.0095
0.0170
0.0000
0.0182
1.5719
0.0337
0.0007
0.0001
0.0077
0.0162
0.0332
0.0006
0.0034
0.0018
0.0047
0.0152
0.0591
0.0010
0.0079
0.0001
0.0041
1.1094
0.0893
0.0084
0.0000
0.0241
1.4207
75
Ownership
of Dwelling
& Business
Services
Banking
and
Insurance
Public
administration
and defence
Other
Services
18
19
20
21
0.0216
0.0023
0.0001
0.0164
0.0314
0.0590
0.0045
0.0242
0.0124
0.0230
0.0199
0.0248
0.0019
0.0134
0.0001
0.0032
0.0063
1.0593
0.0247
0.0000
0.0250
1.3734
0.0255
0.0015
0.0001
0.0159
0.0230
0.0693
0.0021
0.0112
0.0058
0.0226
0.0206
0.0315
0.0047
0.0242
0.0001
0.0122
0.0001
0.0084
1.0361
0.0000
0.0061
1.3211
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
1.0000
0.0000
1.0000
0.0447
0.0020
0.0001
0.0255
0.0374
0.1417
0.0018
0.0099
0.0051
0.0115
0.0379
0.0311
0.0026
0.0298
0.0002
0.0053
0.0001
0.0175
0.0336
0.0000
1.0350
1.4728
April, 2014
APPENDIX 5: Extended Leontief Inverse Matrix for Direct, Indirect and Induced linkages (cont.)
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Services
Other Services
CoE
Output Multiplier
Agriculture
incl.
Livestock
Forestry
and
Logging
Fishing
Mining and
Quarrying
Construction
related
Manufacturing
Other
Manufacturing
Residential
Construction
1.3634
0.0132
0.0101
0.1058
0.1089
0.5135
0.0031
0.0167
0.0086
0.0439
0.1833
0.0431
0.0153
0.1386
0.0010
0.0172
0.0049
0.1199
1.0160
0.0048
0.0462
0.0539
0.2715
0.0022
0.0117
0.0060
0.0185
0.0813
0.0406
0.0082
0.0983
0.0004
0.0102
0.0024
0.1369
0.0076
1.0280
0.0579
0.0628
0.3530
0.0014
0.0075
0.0038
0.0205
0.1037
0.0254
0.0088
0.0810
0.0005
0.0101
0.0029
0.3193
0.0186
0.0149
1.1329
0.1495
0.7036
0.0054
0.0293
0.0150
0.0693
0.2113
0.0685
0.0244
0.1872
0.0014
0.0249
0.0073
0.3073
0.0469
0.0118
0.3154
1.4363
0.8073
0.0051
0.0274
0.0141
0.0803
0.2969
0.0587
0.0245
0.2133
0.0016
0.0223
0.0057
0.4408
0.0250
0.0136
0.2993
0.2710
1.9704
0.0052
0.0283
0.0145
0.0788
0.3166
0.0630
0.0261
0.2269
0.0017
0.0262
0.0063
0.4864
0.0690
0.0223
0.2521
0.5960
0.9908
1.0175
0.0948
0.0486
0.1074
0.3802
0.0960
0.0327
0.2997
0.0020
0.0374
0.0122
0.0976
0.0546
0.0583
0.1543
0.1265
0.1428
0.2224
0.0713
0.0000
0.0888
0.3411
2.8481
0.0289
0.0000
0.0513
0.1627
1.9270
0.0358
0.0000
0.0532
0.2069
2.0593
0.0971
0.0000
0.1451
0.5082
3.3793
0.1061
0.0000
0.1164
0.3934
4.0237
0.1223
0.0000
0.1284
0.4305
4.2071
0.1496
0.0000
0.1974
0.7629
5.1148
76
April, 2014
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Other Services
CoE
Output Multiplier
NonResidential
Construction
Other
Construction
Electricity,
Water
Supply
Trade
Hotel and
Restaurants
Railways
Transport
by Other
Means
10
11
12
13
14
0.6189
0.0374
0.0296
0.2479
0.2813
1.3403
0.0148
0.0803
0.0412
0.1902
0.4043
0.1206
1.0375
0.3458
0.0021
0.0484
0.0144
0.2893
0.1716
0.0000
0.2699
1.0114
5.5860
0.4282
0.0186
0.0128
0.1614
0.1859
0.9615
0.0047
0.0254
0.0130
0.0612
0.2773
0.1388
0.0225
1.2042
0.0016
0.0272
0.0063
0.1504
0.0987
0.0000
0.1172
0.4249
3.9168
0.4712
0.0709
0.0214
0.2537
0.6173
0.9703
0.0182
1.0986
0.0506
0.1081
0.3777
0.0932
0.0322
0.2941
0.0020
0.0361
0.0119
0.2149
0.1484
0.0000
0.1899
0.7302
5.0807
0.4629
0.0719
0.0209
0.2546
0.6289
0.9591
0.0186
0.1007
1.0517
0.1085
0.3763
0.0916
0.0319
0.2911
0.0020
0.0354
0.0117
0.2107
0.1478
0.0000
0.1859
0.7123
5.0621
0.4244
0.0249
0.0192
0.3493
0.2062
0.9982
0.0074
0.0399
0.0205
1.2541
0.3171
0.0894
0.0285
0.2552
0.0017
0.0351
0.0093
0.1871
0.1610
0.0000
0.1723
0.6512
4.6008
77
0.2138
0.0121
0.0094
0.0850
0.1041
0.4306
0.0028
0.0152
0.0078
0.0409
1.1359
0.0572
0.0125
0.1408
0.0056
0.0171
0.0046
0.0998
0.0931
0.0000
0.0822
0.3199
2.5706
0.7629
0.0164
0.0131
0.1270
0.1382
0.7042
0.0040
0.0215
0.0110
0.0521
0.3032
1.0673
0.0230
0.2049
0.0016
0.0216
0.0061
0.1231
0.0858
0.0000
0.1110
0.4251
3.7982
April, 2014
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Industry

Fishing
Other Manufacturing
Other Construction
Trade
Railways
Storage
Communication
Other Services
CoE
Output Multiplier
Storage
Communication
Real
Estate
Services
15
16
17
0.3812
0.0231
0.0174
0.1765
0.2064
0.8584
0.0084
0.0457
0.0234
0.2256
0.2615
0.0878
0.0260
0.2234
1.0014
0.0291
0.0086
0.1880
0.1271
0.0000
0.1551
0.5911
4.0741
0.4054
0.0230
0.0190
0.1578
0.1792
0.9136
0.0053
0.0288
0.0148
0.0823
0.2676
0.0802
0.0253
0.2309
0.0014
1.0341
0.0095
0.1831
0.1029
0.0000
0.1785
0.6500
3.9428
0.0976
0.0042
0.0033
0.0277
0.0395
0.1490
0.0012
0.0065
0.0033
0.0133
0.0524
0.0715
0.0046
0.0421
0.0003
0.0092
1.1110
0.1193
0.0232
0.0000
0.0519
0.1126
1.8313
78
Ownership
of Dwelling
& Business
Services
Banking
and
Insurance
Public
administration
and defence
Other
Services
18
19
20
21
0.1411
0.0089
0.0062
0.0538
0.0750
0.2756
0.0055
0.0300
0.0154
0.0391
0.0893
0.0481
0.0087
0.0774
0.0005
0.0128
0.0092
1.1155
0.0525
0.0000
0.0769
0.2106
2.1414
0.3413
0.0188
0.0162
0.1148
0.1384
0.6412
0.0049
0.0266
0.0136
0.0650
0.2039
0.0929
0.0226
0.1933
0.0011
0.0374
0.0079
0.1570
1.1096
0.0000
0.1433
0.5562
3.3497
0.9290
0.0511
0.0475
0.2910
0.3395
1.6829
0.0083
0.0452
0.0232
0.1247
0.5393
0.1807
0.0525
0.4973
0.0028
0.0742
0.0230
0.4371
0.2163
1.0000
0.4036
1.6366
6.9693
0.5797
0.0315
0.0275
0.1930
0.2329
1.1108
0.0066
0.0359
0.0184
0.0833
0.3485
0.1351
0.0329
0.3162
0.0018
0.0480
0.0134
0.2692
0.1582
0.0000
1.2674
0.9425
4.9103
April, 2014
GLOSSARY
Compensation of
employees
Consumption of
fixed capital
Economic activity
Employed
persons
Employed as per
principal activity
status
Employed as per
subsidiary
activity status
Exports of goods
Exports of
services
Final demand
Final
consumption
expenditure of
government
Final
consumption
expenditure of
households
GDP
Gross fixed
capital formation
Compensation of employees is the total remuneration, in cash or in kind,

payable by an enterprise to an employee in return for work done by the latter
during the accounting period.
Consumption of fixed capital represents the reduction in the value of the fixed
assets used in production during the accounting period resulting from
physical deterioration, normal obsolescence or normal accidental damage.
Any activity resulting in production of goods and services that add value to
national product is considered as an economic activity. Such activities include
production of all goods and services for market (market activities), i.e.
production for pay or profit, and, among the non-market activities, the
production of goods and household services with paid domestic employees
and owner occupied dwellings for own consumption and own account
production of fixed assets.
Number of persons usually employed in the principal and subsidiary statuses.
Those in labour force pursuing some economic activity for major time during
the reference period of 365 days
Those in labour force pursuing some economic activity for a relatively shorter
time (minor time) during the reference period of 365 days
Exports of goods consist of exports of the following items from residents to
non-residents: generally with a change of ownership being involved: general
merchandise, goods for processing, goods procured in domestic ports by nonresident carriers and non-monetary gold.
Exports of services consist of exports of the following services provided by
residents to non-residents: transportation; travel; communications;
construction; insurance; financial; computer and information; royalties and
licence fees; other business services; personal, cultural, and recreational
services; and government services n.i.e.
Transactions that involve purchases of produced goods and services for final
uses are presented in final demand table. The final use for a good or service
is that it is not used up entirely in the reference year as an intermediate input
in the production of some other good or service. Transactions for goods and
services that are completely used to produce other goods and services are
shown in the intermediate input (or use) table of the accounts.
Government final consumption expenditure consists of expenditure, including
imputed expenditure, incurred by general government on both individual
consumption goods and services and collective consumption services.
Household final consumption expenditure consists of the expenditure,
including imputed expenditure, incurred by resident households on individual
consumption goods and services, including those sold at prices that are not
economically significant.
Is the total market value of goods and services produced in the economy
within a given period after deducting the cost of goods and services used up in
the process of production but before deducting allowances for the
consumption of fixed capital. Thus gross domestic product, as here defined, is
at market prices.
Gross fixed capital formation is measured by the total value of a producers
acquisitions, less disposals, of fixed assets during the accounting period plus
79
Gross value
added
Imports of goods
Imports of
services
Input-output
model
Input-output
tables
Intermediate
consumption
Leontief inverse
(input-output)
table
Multipliers
Output
Output multiplier
Total economy
April, 2014
certain additions to the value of non-produced assets (such as subsoil assets

or major improvements in the quantity, quality or productivity of land)
realised by the productive activity of institutional units.
Gross value added is the value of output less the value of intermediate
consumption; it is a measure of the contribution to GDP made by an individual
producer, industry or sector; gross value added is the source from which the
primary incomes of the SNA are generated and is therefore carried forward
into the primary distribution of income account.
Imports of goods consist of imports of the following items from non-residents
to residents, generally with a change of ownership being involved: general
merchandise, goods for processing, goods procured in foreign ports by
domestic carriers, and non-monetary gold.
Imports of services consist of the following services purchased by residents
from non-residents: transportation; travel; communications; construction;
insurance; financial; computer and information; royalties and licence fees;
other business services; personal, cultural, and recreational services; and
government services n.i.e.
It provides a detailed breakdown of economic activity among business
industries and a detailed breakdown of their inputs and outputs by
commodity associated with some arbitrarily fixed exogenous demand. It also
provides supply requirements from other sources such as imports and
government production of goods and services. The input-output model is a
structural model dealing primarily with resource allocation in the economy
corresponding to an exogenously given demand.
Input-output tables are derived from Supply and Use Tables, which show the
process of flows of goods and services through the economic system between
producers and consumers. The transactors involved in the production process
are individuals (persons or households), establishments (production units of
businesses and governments), non-business entities such as non-profit
institutions, and governments. An input-output table presents a detailed
analysis of the process of production and the use of goods and services
(products) and the income generated in that production.; they can be either in
the form of (a) supply and use tables or (b) symmetric input-output tables.
These tables include the Imports Use and Domestic Use matrices, industry by
industry and product by product matrices plus the Leontief inverse,
multipliers and other analyses of their structure.
Intermediate consumption consists of the value of the goods and services
consumed as inputs by a process of production, excluding fixed assets whose
consumption is recorded as consumption of fixed capital; the goods or
services may be either transformed or used up by the production process.
The columns of the Leontief inverse (input-output) table show the input
requirements, both direct and indirect, on all other producers, generated by
one unit of output
An I-O multiplier is a quantitative measure created by a particular I-O based
economic model. It is an analytical answers to a hypothetical question about
how a certain expenditure is expected to impact the economy. The multipliers
allow users to make estimates of the whole economy impacts of small changes
in the economy
Output consists of those goods or services that are produced within an
establishment that become available for use outside that establishment, plus
any goods and services produced for own final use.
output multiplier for a particular industry is defined to be the total of all
outputs from each domestic industry required in order to produce one
additional unit of output: that is, the column sums (i ) from Leontief inverse
matrix (Lij).
The total economy consists of all the institutional units which are resident in
the economic territory of a country.
80
April, 2014
Total final
expenditure /
Final Demand
This is the sum total of final consumption, gross capital formation and exports
of goods and services. Total final expenditure is the same as total demand by
final buyers and is equal to total final output.
Total
intermediate
consumption
The total intermediate consumption of each industry is the industrys total

purchases of the outputs of other industries as well as purchases of imports of
goods and services and intra-industry purchases for use in its production
process. This is adjusted for the change in inventories of materials and fuels
and excludes primary inputs.
The total output of an industry is the aggregate value of the goods and services
together with the work-in-progress produced by the industry. It is equal to the
value of the industrys sales plus any increase (and less any decrease) in the
value of its inventories of finished products and work-in progress. Output is
thus measured after deducting holding gains. The outputs of the distribution
and service trades industries are measured on a gross margin basis.
Valuables are produced assets that are not used primarily for production or
consumption, that are expected to appreciate or at least not to decline in real
value, that do not deteriorate over time under normal conditions and that are
acquired and held primarily as stores of value.
Total output
Valuables
81

Impact of Housing On GDP Employment FULL REPORT

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Impact of Housing On GDP Employment FULL REPORT

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Impact of Investments in the

Housing Sector on GDP and

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National Council of Applied Economic Research

National Council of Applied Economic Research

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National Council of Applied Economic Research

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sell or buy inputs

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ABBREVIATIONS AND ACRONYMS

Consumption of Fixed Capital

Change in stocks/change in inventories

Central Statistical Office

Employment and Unemployment Survey

Exports of goods and services

Final Use / Final Demand

Government Final Consumption Expenditure

Gross Domestic Product

Gross Fixed Capital Formation

Gross Value Added

Indian Institute for Human Settlements

Imports of goods and services

Input output transaction table

National Accounts Statistics

National Council of Applied Economic Research

Net capital stock

National Industrial Classification

Net Indirect tax

National Sample Survey Office

Operating Surplus/Mixed Income

Private Final Consumption Expenditure

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National Council of Applied Economic Research

Context of the study

National Council of Applied Economic Research

National Council of Applied Economic Research

Scope of Work and Study Objectives

National Council of Applied Economic Research

Structure of the Report

National Council of Applied Economic Research

National Council of Applied Economic Research

National Council of Applied Economic Research

Input-Output Model for Impact Analysis

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The above matrix represents the following set of n balance equations:x i = x i1 + x

+y i, i =1,2......n, Yi is final use

These equations can be written in matrix notations as

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National Council of Applied Economic Research

National Council of Applied Economic Research

final demand in a sector j is estimated by multiplying the row vector of the

Inter-industry Linkage Analysis

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Methodology and Approaches to construct Housing Sector IO Table

National Council of Applied Economic Research

Table 2.1: Aggregation scheme

Proposed IO Sectors - Housing Study

Concordance with 130 sectors

Agriculture incl. Livestock