Also Read: What’s behind India’s GDP revision and why it matters
The new GDP series: Here are the key frequently asked questions and answers
1. What is Gross Domestic Product (GDP)?
Gross Domestic Product (GDP) is the total value of all final goods and services produced within a country’s economy during a specific period. To meaningfully compare economic growth across different periods, it is essential that consistent measurement methods and data sources are used to ensure accuracy and comparability.
2. What is a base year in National Accounts? What does rebasing mean and why is it important?
In National Accounts Statistics, the base year is the reference year whose prices are used to calculate real, or inflation-adjusted, economic growth. It provides a benchmark against which changes in output and prices are measured over time. Rebasing is the process of updating this benchmark year using more recent data to reflect the current structure of the economy. During a base year revision, the methodology and data sources used to compile GDP and other macroeconomic indicators are reviewed and finalised, and these remain in place until the next revision.
Updating the base year periodically ensures that economic estimates remain relevant and accurate, capturing structural changes in the economy while incorporating improved data sources and more robust statistical methods.
3. How often does MoSPI revise the base year?
Under normal circumstances, the Ministry of Statistics and Programme Implementation (MoSPI) aims to revise the base year every five years, in line with international best practices. “We hope to do it every five years or so,” Secretary Saurabh Garg said.
India’s GDP base year was last revised in 2015. That update significantly altered growth estimates, boosting the size of the economy by about $120 billion and revising the 2013–14 growth rate upward to 6.9% from 4.7%.
4. Why is the GDP base year being revised to 2022–23?
The base year is being updated from 2011–12 to 2022–23 to better reflect the current structure of the economy. Although MoSPI aims to revise the base year every five years, several intervening years were considered unsuitable.
Also Read: India’s GDP reset to reflect seasonality, expanded coverage: Saurabh Garg
FY2017–18 saw the rollout of the Goods and Services Tax (GST), which required time for data stabilisation. FY2019–20 and FY2020–21 were disrupted by the COVID-19 pandemic. FY2021–22 recorded unusually high growth due to the base effect from the pandemic contraction.
After consultations, the Advisory Committee on National Accounts Statistics (ACNAS) recommended 2022–23 as a “normal” year with adequate survey data availability.
5. How comparable is the revised series with global standards?
India’s GDP estimates are compiled in line with the UN’s System of National Accounts 2008 (SNA 2008), the internationally accepted framework. The UN is transitioning to SNA 2025, which countries are expected to adopt around 2029–30. India plans to move to SNA 2025 in its next base revision.
India also subscribes to the IMF’s Special Data Dissemination Standard (SDDS), indicating adherence to global statistical best practices.
6. Will MoSPI publish methodology details?
Yes. A comprehensive document outlining sources and methods used in the new series will be released in MoSPI’s publication Sources and Methods in the coming months.
7. What new data sources are being incorporated?
The new series uses expanded and more granular data sources, including:
-ASUSE and PLFS surveys for annual household sector estimates
-GST data for corporate allocation, validation and quarterly indicators
-e-Vahan data for transport-related consumption estimates
-Public Finance Management System (PFMS) data for government expenditure
-Updated sectoral studies in agriculture, fisheries, dairy and transport
These additions aim to improve coverage, reduce estimation gaps and better capture informal and digital activity.
8. What are the major methodological changes?
Key improvements include:
- Shift to double deflation in manufacturing and agriculture
- Elimination of single deflation; use of more granular price indices
- Integration of Supply and Use Tables (SUT) to reduce discrepancies
- Better segregation of multi-activity corporate enterprises using MGT-7 data
- More refined estimation of Private Final Consumption Expenditure (PFCE)
- Updated rates and ratios based on recent surveys
- Non-financial corporations (using MCA data)
- Financial corporations (using regulator data such as RBI, SEBI, IRDAI)
- General government (budget documents and PFMS data)
- Household sector (agriculture, construction and survey-based estimates).
- NPISH (currently included within household sector estimates)
- Adjustments for pension reforms (NPS/OPS)
- Imputed housing benefits
- Improved coverage of local bodies
- Better methods for subsidies estimation
- Shift from Pro-Rata benchmarking to Proportional Denton method
- Expanded GST use as a high-frequency indicator
- Adoption of FISIM for financial services
- More granular deflation practices
- Better alignment between quarterly and annual accounts
9. Where can detailed documentation be accessed?
ACNAS and its five sub-committees held 40 meetings over two years to review methodology and data improvements. Reports of the sub-committees dealing with all-India estimates are available on the Ministry’s website. Additional reports on regional accounts and SNA updates will be released later.
10. How is the household sector being measured more accurately?
Earlier, the household sector was extrapolated between surveys using proxy indicators. The new series uses annual survey-based level estimates from ASUSE and PLFS, allowing more dynamic and direct measurement.
11. Are domestic workers included in GDP?
Yes. Activities of households as employers of domestic personnel are included. Estimates are based on PLFS data on employment and wages.
12. How are digital and gig economy sectors captured?
Corporate digital activity is covered through MCA-21 data. In the household sector, ASUSE and PLFS now capture gig workers and platform-based activities more directly, including aggregator drivers and delivery services.
13. Does the new series address concerns about GDP deflators?
Yes. Single deflation has been removed. Double deflation is applied in manufacturing and agriculture, and deflators are used at a more granular level. These changes aim to improve real growth measurement.
14. What is the Supply and Use Table (SUT) framework?
SUT maps how goods and services are produced (supply) and how they are used (consumption, investment, exports). Integrating SUT into national accounts helps balance production and expenditure estimates, reducing discrepancies.
15. Are institutional sector estimates compiled?
Yes. Following SNA 2008, estimates are prepared for:
- Non-financial corporations (using MCA data)
- Financial corporations (using regulator data such as RBI, SEBI, IRDAI)
- General government (budget documents and PFMS data)
- Household sector (agriculture, construction and survey-based estimates).
- NPISH (currently included within household sector estimates)
16. How is the General Government sector estimated and what has changed?
Government output is measured by summing production costs — compensation, intermediate consumption and capital consumption.
Improvements include:
- Adjustments for pension reforms (NPS/OPS)
- Imputed housing benefits
- Improved coverage of local bodies
- Better methods for subsidies estimation
17. What has changed in quarterly GDP estimation?
Major updates include:
- Shift from Pro-Rata benchmarking to Proportional Denton method
- Expanded GST use as a high-frequency indicator
- Adoption of FISIM for financial services
- More granular deflation practices
- Better alignment between quarterly and annual accounts
18. Will past estimates change?
Yes. Annual and quarterly estimates from 2022–23 onwards will be revised under the new base year and methodology.
19. What about GSDP?
States revise their Gross State Domestic Product (GSDP) base year in line with national updates. MoSPI provides methodological guidance to ensure uniformity across states.
Improvements include greater reliance on direct estimation, reduced use of proxies, and improved state-level data use.
20. How does GDP affect common citizens?
GDP data informs policymaking across sectors such as agriculture, manufacturing and services. It influences budget priorities, credit conditions, investment planning and development strategies, thereby indirectly affecting livelihoods, jobs and income opportunities.