New GDP Series: 28 Out Of 30 Mfg Categories Used Double Deflation, Pg15

Key Highlights:

• The new Gross Domestic Product (GDP) series now employs the 'double deflation' method in 28 out of 30 manufacturing categories.
• The Ministry of Statistics and Programme Implementation (MoSPI) released the 'Sources and Methods' document detailing these changes.
• The base year for the new GDP series is 2022-23.
• Two manufacturing categories, due to high imported inputs, currently do not use double deflation.

Detailed Insights:

• Double deflation is a method where both input and output values are adjusted by their respective inflation rates to calculate real Gross Value Added (GVA).
• Previously, MoSPI applied double deflation only to the agriculture and mining and quarrying sectors.
• Using a single deflator for both inputs and outputs can lead to inaccurate real growth estimates if their prices change at different rates.
• The timely release of the 'Sources and Methods' document, seven months after the new GDP series, marks the shortest time taken for its publication.
• This document consolidates concepts, definitions, data sources, and compilation practices for the new GDP series.
• It integrates recommendations from sub-committees of the Advisory Committee on National Accounts Statistics.

Key Concepts Involved:

• Double Deflation: A statistical method used to calculate real Gross Value Added (GVA) by separately deflating the value of output and the value of intermediate consumption.
• Gross Value Added (GVA): The measure of the value of goods and services produced in an area, industry, or sector of an economy, minus the cost of inputs and raw materials.
• Base Year: A reference year used for calculating economic indicators like GDP, allowing for comparison of real growth over time by removing the effect of price changes.
• Ministry of Statistics and Programme Implementation (MoSPI): The central government agency responsible for the development of national accounts statistics and statistical coordination in India.