Introduction of New GDP Series

A new GDP series with the base year 2022-23 has been released by the Ministry of Statistics and Programme Implementation to provide a more accurate view of India's economy. This update aims to address the limitations of previous estimates based on the outdated 2011-12 base year.

Key Economic Estimates

• GDP Estimates:
  • 2022-23: ₹261.18 lakh crore
  • 2023-24: ₹289.84 lakh crore
  • 2024-25: ₹318.07 lakh crore
• Sectoral GVA Shares (2024-25):
  • Primary Sector: 21.4%
  • Secondary Sector: 25.8%
  • Tertiary Sector: 52.9%
• Manufacturing Growth: High real GVA growth rates of 12.7% in 2023-24 and 9.3% in 2024-25.
• Private Final Consumption Expenditure: Around 56% of GDP both at current and constant prices for 2023-24 and 2024-25.

Methodological Refinements

• Segregation of multi-activity enterprises based on revenue share information using MGT 7/7A data.
• Use of a separate blown-up factor for scaling up GVA based on industry, size class, and paid-up capital.
• Comprehensive coverage of Limited Liability Partnerships (LLPs) using MCA data.
• Use of high-frequency data on GVA per worker (GVAPW) and Periodic Labour Force Survey (PLFS) estimates to calculate the Household Sector GVA.

Estimation Improvements

• Introduction of 'double deflation' and 'volume extrapolation' methods for real GVA estimation.
• Benchmark estimates for 2022-23 PFCE derived using the Household Consumption Expenditure Survey (HCES 2022-23).

Challenges in Sectoral GVA Allocation

Allocation of national-level total GVA for private corporations across states remains a challenge due to data being available only at the enterprise level. The new series uses GST and ASI data to address limitations in the ASI frame.

Household Sector GVA Estimation

• GVA derived from GVAPW (from ASUSE) and worker numbers (from PLFS).
• Volatility in estimates noted for specific industries and states, such as the manufacture of rubber and plastic products and the manufacturing industry in Bihar.
• Use of a three-year moving average recommended to stabilize estimates.

Conclusion

The new GDP series aims to provide a more accurate picture of the Indian economy. Improvements in the sampling frame and survey methodologies could further enhance GDP and GSDP estimates.

Author: G.C. Manna, Professor at the Institute for Human Development, Senior Adviser at NCAER.