Overview of India's New National Accounts Statistics
India has updated its national accounts statistics, shifting the base year from 2011-12 to 2022-23. This revision incorporates new surveys, data sources, and methodological changes to improve the accuracy and reliability of GDP estimates. Key enhancements include better estimates for the informal sector, the use of a double deflator in manufacturing, aligning private final consumption expenditure (PFCE) with household surveys, and refined classification of corporate sectors.
Major Changes in Headline Data
- Nominal GDP Revision:
- Revised down by 2.9% for FY23.
- PFCE revised down by 9.7%, now representing 57.1% of GDP, compared to the previous 61.5%.
- Total investments slightly reduced by 0.6% and services imports decreased by 20%.
- Gross Value Added (GVA) Adjustments:
- Nominal GVA revised down by 3.6% in FY23.
- Upward revisions in agriculture (7%) and real estate (9%).
- Downward revisions in manufacturing, construction, trade & repair services, and transport sectors.
- Discrepancies:
- No discrepancies in nominal GDP under the new series, but remain in quarterly data.
Unchanged Economic Narratives
- Private Corporate Capex:
- Remains low, with a slight upward revision in total investments to 34.4% of GDP.
- Private corporate capex slightly reduced, with a small increase for the public corporate sector.
- Household Income:
- Revised down by 1% in FY23 and 3.6% in FY24, showing slower growth than previously estimated.
New Findings in GDP Series
- Informal Sector Estimations:
- Better equipped to estimate the informal sector with new surveys, possibly indicating it is weaker than previously thought.
- Gross Domestic Savings (GDS):
- Base year GDS revised down but increased sharply to 34.9% in FY25, led by household sector savings.
- Discrepancies between RBI’s and CSO’s estimates of household net financial savings noted.
Implications for Future Growth
- Fiscal Deficit and Debt:
- Fiscal deficit projected at 4.5% of GDP for FY27.
- Debt-to-GDP ratio slightly increased to 57.5% in FY26.
- Economic Growth Concerns:
- Possible slowdown in consumption and savings growth.
- Real GDP growth expected to moderate from 7.7% in FY26 to around 6.5% the following year.
