Revised Methodology for GDP Measurement
The government has introduced significant methodological changes to improve the measurement of Gross Domestic Product (GDP) and related metrics. These changes aim to address previous discrepancies resulting from the earlier use of a single deflator method, which caused inconsistencies between the production and expenditure sides.
Key Changes Implemented
- Double Deflation Method: Newly adopted in agriculture and manufacturing to better reflect real values.
- Base Year Update: The base year for calculations is revised to 2022-23 from 2011-12.
- Expanded Coverage of Unincorporated Sector: Utilizes data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE).
- Labor Input Refinement: Employs data from the Periodic Labour Force Survey (PLFS).
- Use of Administrative Databases: Greater reliance on GST and similar datasets.
- Integration of Accounts: Implements the Supply Use Tables (SUT) framework for tighter integration.
Impact and Observations
- Discrepancies in real GDP reduced to 0.4% for 2023-24 and 1.2% for 2024-25, compared to previous discrepancies of 0.8% and (-)1.6% in the 2011-12 series.
- Former Chief Statistician Pronab Sen's Insights:
- SUT framework aims to eliminate discrepancies but some remain due to unresolved measurement issues.
- The adoption of the double deflator is a significant improvement, though its precise impact on growth rates is unclear.
- Improved segregation of manufacturing and services activities; the exact quantitative impact is still unknown.
Revised Growth Rates
- Real GDP growth for 2023-24 initially estimated at 9.2% is revised to 7.2% under the new series.
- 2024-25 growth projected at 7.1%, up from earlier estimates of 6.5%.
- 2025-26 growth pegged at 7.6%, slightly higher than the previous 7.4% estimate under the 2011-12 series.
- These revisions are also reflected in Gross Value Added (GVA) data.
