MoSPI Secy: Nominal GDP revised down as informal sector data has improved, Pg13

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) has revised down Nominal GDP estimates for previous years under the old 2011-12 series.
• This revision is primarily attributed to improved data collection and a better picture of the informal sector.
• The new 2022-23 base-year GDP series now uses direct empirical data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) and Periodic Labour Force Survey (PLFS).
• The shift from proxy-based estimates to direct annual measurements for the unorganised sector is the main driver of the revision.

Detailed Insights:

• The previous GDP series estimated Gross Value Added (GVA) for the unorganised sector using proxies and decadal surveys.
• The new methodology allows for annual capture of the informal sector's distinct growth patterns, providing a stronger empirical basis.
• MoSPI clarified that the revision represents a more accurate estimation based on better data, not an overestimation of past GDP.
• The new series addresses long-standing criticisms regarding the inadequate capture of the informal economy in GDP calculations.
• The use of producer price data in GDP calculation was already implemented in the 2011-12 series, with necessary corrections for taxes and trade margins.

Key Concepts Involved:

• Nominal GDP: The total value of all goods and services produced in a country in a given year, measured at current market prices.
• Gross Value Added (GVA): A measure of the value of goods and services produced in an area, industry, or sector of an economy.
• Informal Sector: The part of an economy that is not taxed, monitored by any form of government, or included in any gross national product.
• Base Year: A specific year chosen as a reference point for comparison in economic indices, such as GDP or inflation.
• Annual Survey of Unincorporated Sector Enterprises (ASUSE): A survey conducted by MoSPI to collect data on unincorporated non-agricultural enterprises.
• Periodic Labour Force Survey (PLFS): A survey conducted by MoSPI to estimate employment and unemployment indicators in both urban and rural areas.