Constructing Private Gross Fixed Capital Formation and Capital Stock for Punjab (India): New Evidence (2011–2021)

Capital accumulation and investment positively affect economic growth. Investment is measured by gross fixed capital formation (GFCF), at both national and sub-national levels. GFCF is constructed for both public (government) and private (household and corporate) sectors. At the national level, information on both private and public GFCF is readily available. But at the sub-national level, only public GFCF is available, which does not reflect the accurate investment level. We attempt to bridge the gap by constructing private GFCF and capital stock for Punjab from 2011 to 2021 for nine industries. We chose Punjab because the state was using archaic surveys and reports to calculate private GFCF (up to 2016), which may lead to an underestimation of the overall GFCF and capital stock. We find a higher and more persistent private GFCF than the state’s estimates. Such a trend has also been noticed in several sectors and is even true for private capital stock.