<p>India is set to adopt a new <a href="https://www.deccanherald.com/tags/gdp">GDP </a>series with 2022-23 as the base year replacing the decade-old 2011-12 series. The Ministry of Statistics and Programme Implementation is scheduled to release the national accounts data based on the new series on Friday. </p><p>Apart from the base year, the new series also incorporates several methodological and statistical upgrades. </p><p>In this issue of DH Deciphers, <strong>Gyanendra Keshri</strong> decodes the new GDP series and its impact on the country’s macroeconomic data.</p> .<p>Gross Domestic Product (GDP) is the total monetary value of final goods and services produced within a country's borders during a specific period, usually a year or quarter. </p><p>It serves as a primary indicator of economic health, measuring production, income, and expenditure. The Ministry of Statistics and Programme Implementation prepares the country’s GDP estimates as per the 2008 System of National of Accounts (SNA 2008). </p><p>Two types of GDP data are released. Nominal GDP measured at current market prices without adjusting for inflation. Real GDP data is derived by adjusting for inflation to reflect true production volume changes.</p> .<p>The base year in National Accounts Statistics is the reference year whose prices are used to calculate real growth. It is used for calculating real GDP data. It helps in assessing whether growth has been caused by increased production or price changes. 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 gross domestic product and its components, consumer price index and index of industrial production, moving forward.</p> .<p>The Ministry of Statistics and Programme Implementation has decided to update the base year of the national accounts from the 2011-12 to 2022-23. The MoSPI's stated goal is to revise the base year every five years. However, the years between FY 2017-18 to FY 2021-22 were not suitable as base year because of major disruptive changes in the economy. GST was introduced in 2017-18. It required time for consolidation. FY 2019-20 and FY 2020-21 were impacted by the COVID-19 pandemic. The fiscal 2021-22 witnessed sharp GDP growth largely due to the base effect of post-COVID recovery, making it unsuitable. An Advisory Committee set up by the government found FY 2022-23 to be a normal economic year to make it a base year.</p> .<p>Apart from latest quarterly and yearly estimates, the Ministry is also expected to release back series data on the national accounts. Both the annual and quarterly estimates for the year 2022-23 to 2025-26 are expected to be released on Friday. Until July-September quarter the ministry has already released the national accounts data based on the 2011-12 series. </p><p>Quarterly data from April-June 2022 to July-September 2025 is likely to be released based on the back series. October-December 2025 quarter data will be the first based on the 2022-23 base year. As per the practice, back-series estimates are recalculated using revised methodology of the new GDP series up to the previous base year. After that, the data is linked at a disaggregated level and extended back to 1950-51.</p> .<p>Several new data sources including goods and services tax, e-Vahan and household services provided by cook, driver and domestic helps, are being used in the new series. </p><p>Earlier, the household sector was estimated using growth rates between surveys or proxy indicators. 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). </p><p>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 besides its extensive use in quaternisation and as an indicator in Quarterly National Accounts. Data from e-Vahan are being used to estimate Private Final Consumption Expenditure (PFCE) related to road transport services.</p>
<p>India is set to adopt a new <a href="https://www.deccanherald.com/tags/gdp">GDP </a>series with 2022-23 as the base year replacing the decade-old 2011-12 series. The Ministry of Statistics and Programme Implementation is scheduled to release the national accounts data based on the new series on Friday. </p><p>Apart from the base year, the new series also incorporates several methodological and statistical upgrades. </p><p>In this issue of DH Deciphers, <strong>Gyanendra Keshri</strong> decodes the new GDP series and its impact on the country’s macroeconomic data.</p> .<p>Gross Domestic Product (GDP) is the total monetary value of final goods and services produced within a country's borders during a specific period, usually a year or quarter. </p><p>It serves as a primary indicator of economic health, measuring production, income, and expenditure. The Ministry of Statistics and Programme Implementation prepares the country’s GDP estimates as per the 2008 System of National of Accounts (SNA 2008). </p><p>Two types of GDP data are released. Nominal GDP measured at current market prices without adjusting for inflation. Real GDP data is derived by adjusting for inflation to reflect true production volume changes.</p> .<p>The base year in National Accounts Statistics is the reference year whose prices are used to calculate real growth. It is used for calculating real GDP data. It helps in assessing whether growth has been caused by increased production or price changes. 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 gross domestic product and its components, consumer price index and index of industrial production, moving forward.</p> .<p>The Ministry of Statistics and Programme Implementation has decided to update the base year of the national accounts from the 2011-12 to 2022-23. The MoSPI's stated goal is to revise the base year every five years. However, the years between FY 2017-18 to FY 2021-22 were not suitable as base year because of major disruptive changes in the economy. GST was introduced in 2017-18. It required time for consolidation. FY 2019-20 and FY 2020-21 were impacted by the COVID-19 pandemic. The fiscal 2021-22 witnessed sharp GDP growth largely due to the base effect of post-COVID recovery, making it unsuitable. An Advisory Committee set up by the government found FY 2022-23 to be a normal economic year to make it a base year.</p> .<p>Apart from latest quarterly and yearly estimates, the Ministry is also expected to release back series data on the national accounts. Both the annual and quarterly estimates for the year 2022-23 to 2025-26 are expected to be released on Friday. Until July-September quarter the ministry has already released the national accounts data based on the 2011-12 series. </p><p>Quarterly data from April-June 2022 to July-September 2025 is likely to be released based on the back series. October-December 2025 quarter data will be the first based on the 2022-23 base year. As per the practice, back-series estimates are recalculated using revised methodology of the new GDP series up to the previous base year. After that, the data is linked at a disaggregated level and extended back to 1950-51.</p> .<p>Several new data sources including goods and services tax, e-Vahan and household services provided by cook, driver and domestic helps, are being used in the new series. </p><p>Earlier, the household sector was estimated using growth rates between surveys or proxy indicators. 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). </p><p>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 besides its extensive use in quaternisation and as an indicator in Quarterly National Accounts. Data from e-Vahan are being used to estimate Private Final Consumption Expenditure (PFCE) related to road transport services.</p>