New Delhi, Feb 27 (PTI) The Ministry of Statistics and Programme Implementation (MoSPI) on Friday released the New Series of Annual and Quarterly National Accounts or GDP Estimates with base year 2022–23, replacing the previous series with base year of 2011–12.
Here is a quick guide to the fundamental terms used to measure India’s economic growth.
What is Gross Domestic Product? ———————————— Gross Domestic Product or GDP is the value of final goods and services produced in the domestic economy in a financial year.
What is a base year with reference to National Accounts? ———————————————————— The base year in National Accounts Statistics is the reference year whose prices are used to calculate real growth. Rebasing refers to a process of updating base-period benchmarks with new updated statistics to arrive at a new economic structure that will serve as the basis for estimating GDP and its components, consumer price index and index of industrial production, movingforward.
The base year is updated from time to time to reflect the changes that have happened in the economy over the years. This helps make economic data more accurate. It also allows the use of new data sources and better methods for calculating estimates.Under normal conditions, it has been MoSPI’s endeavor to revise the base year periodically in five years, as per international recommendations.
Why GDP base revision delayed this time? ————————————————– It is the 9th series of GDP. The last revision was in 2015 with base year 2011-12. The delay in release of new series is on account of Covid pandemic and implementation of Goods and Services Tax (GST) in 2017-18 which required time for consolidation.
Also, fiscal 2021-22 witnessed sharp GDP growth largely due to the base effect of post-COVID recovery, making it unsuitable, for base revision.
After detailed discussions, the Advisory Committee on National Accounts Statistics recommended 2022-23 as the new base year.
Back series data is expected to be released by December 2026. As per the practice, in India, back-series estimates are recalculated using revised methodology of the new GDP series up to the previous base year.
What new data are being incorporating in new GDP series? —————————————————————– In the new series, actual level estimates are being prepared using regular annual surveys such as Annual Survey of Unincorporated Sector Enterprise (ASUSE) and Periodic Labour Force Survey (PLFS).
Earlier, the household sector was estimated using growth rates between surveys or proxy indicators.
Data from GST are being used for allocation of all-India estimates for private corporate sector across states, and for cross-validation in annual accounts.
Data from e-Vahan are being used to estimate Private Final ConsumptionExpenditure (PFCE) related to road transport services.
Data from the Public Financial Management System (PFMS) are being used to compile central government estimates and allocate them among states.
New and updated rates and ratios are being adopted based on recent studies conducted by expert institutions.
What are major methodological changes in new GDP series? ————————————————————– It captures increased dynamism in measuring the household sector, and includes contribution of hired domestic workers (like cooks, drivers, persons cleaning households, etc.) by the households included in estimation of GD.
It also uses double deflation or single extrapolation, and segregates multi-activity private corporations..
Revised base year improve measurement of newer sectors like digital services, platform economy, and gig workers, among others. PTI NKD CS NKD MR
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