National Transfer Accounts (NTA) is a systematic approach to introduce age into the analysis of national income and accounting. It provides with the analytical bases and empirical frameworks to estimate the impact of age structure transition on (a) dynamic macroeconomic growth through income, savings, and investments, and (b) intergenerational equity and poverty alleviation through asset reallocations and transfers. NTA recognizes individual as a basic analytical entity, but encompasses the working of the entire economy in term of public and private institutions, policies, and programmes. In general, the outcomes of construction and analysis of NTA are useful for design and implementation of long term economic growth and intergenerational equity with special reference to age structure transitions. In particular, the outcomes are of relevance and usefulness for India, because its economic policies and programmes have been aimed at long term economic growth with equity of all descriptions in the light of challenges of its population size and growth, and current and future age structure transitions. However, construction of NTA is new for Indian economics.

This discussion paper presents preliminary results in the construction of Flow Accounts of NTA for India in 1999-00. This construction involves four sequential stages: Estimation of aggregate controls; Age allocation of aggregate controls; Estimation of life cycle deficits; Estimation of age reallocations. Throughout, general NTA methodology is combined and adjusted with the institutional settings and data constraints in India.

Rest of this paper is organized as follows. Section 2 presents an overview India’s macroeconomic economy in the context of construction of NTA. Frameworks, estimation results, and preliminary conclusions and implications of India’s NTA 1999-00 are presented in section 3.