Unstable, too broad: No UPI payment data in new GDP series, Pg15

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) will not use UPI transaction data for calculating GDP in the new revised series due to unstable data and broad payment categories.
• A sub-committee of the Advisory Committee on National Accounts Statistics (ACNAS) deemed it premature to use UPI data for estimating Private Final Consumption Expenditure (PFCE).
• 'Grocery Stores, Supermarkets' category, accounting for 25% of person-to-merchant transactions by volume and 9% by value in January, is too broad for item-wise PFCE compilation.
• GDP data for October-December 2025 and the second advance estimate for the financial year 2025-26, with 2022-23 as the base year, will be released on Friday.

Detailed Insights:

• The exploration of UPI transaction data was proposed to accurately capture consumption at an item level for PFCE estimation.
• PFCE, an indicator of household consumption levels, constitutes more than half of India’s GDP.
• MoSPI calculates GDP using the production/income approach and the expenditure approach, with changes in expenditure components being crucial for policy.
• The sub-committee report stated that UPI payment data is not stable, as many people are yet to transition from cash transactions.
• The current PFCE methodology uses indicators from relevant sectors vis-a-vis items encompassed in the production side due to the lack of high-frequency indicators pertaining to item-level household consumption figures.
• The last update to India’s GDP series occurred over a decade ago, in early 2015.

Key Concepts Involved:

• GDP (Gross Domestic Product): The monetary value of all finished goods and services made within a country during a specific period.
• PFCE (Private Final Consumption Expenditure): A measure of the expenditure on goods and services by households and non-profit institutions serving households.
• UPI (Unified Payments Interface): A real-time payment system that facilitates instant fund transfers between two bank accounts through a mobile platform.