IMF gives ‘C’ grade for India’s national accounts statistics, Pg1

Key Highlights:

• The IMF has given India's national accounts statistics, including GDP and GVA, a grade of 'C' in its annual review.
• A 'C' grade indicates that the available data has some shortcomings that somewhat hamper surveillance.
• The IMF highlighted an outdated base year of 2011-12 and the use of wholesale price indices as data sources for deflators.
• The Consumer Price Index (CPI) received a 'B' grade, reflecting an outdated base year, items basket, and weights.
• The new series of both GDP and CPI datasets are expected to be released in early or mid 2026.

Detailed Insights:

• The IMF's Article IV assessment of India's economic framework noted that national accounts data are available at adequate frequency and timeliness.
• Sizeable discrepancies between the production and expenditure approaches of measuring GDP indicate a need to enhance the coverage of expenditure approach data and the informal sector.
• The Indian government uses the income approach to measure GDP, but also provides an estimate based on the expenditure approach.
• The IMF highlighted the lack of seasonally adjusted data and room for improvement of other statistical techniques used in the quarterly national accounts data.
• The 'B' grade for CPI reflects that the basket likely fails to accurately represent current spending habits due to the outdated base year.
• The Ministry of Statistics and Programme Implementation is working on updating the GDP and CPI base years and methodology.
• Other facets of government data, including government finance statistics and external sector statistics, were all scored 'B'.
• Data weaknesses in India’s national accounts statistics have remained broadly unchanged since last year’s review.

Key Concepts Involved:

• GDP (Gross Domestic Product): The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
• GVA (Gross Value Added): A measure of the total value of goods and services produced in an economy, less the value of intermediate consumption used in production.
• CPI (Consumer Price Index): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.