New GDP series, charting the path ahead, Pg12

Key Highlights:

• The Ministry of Statistics and Programme Implementation released a new GDP series with the base year 2022-23 on February 27, 2026.
• The new series estimates the Indian economy's size at ₹261.18 lakh crore (FY 2022-23), ₹289.84 lakh crore (FY 2023-24), and ₹318.07 lakh crore (FY 2024-25) at current prices.
• The manufacturing sector showed high real GVA growth of 12.7% in 2023-24 and 9.3% in 2024-25.
• Private final consumption expenditure constitutes approximately 56% of the GDP.

Detailed Insights:

• The updated GDP series addresses the need for a more accurate depiction of the Indian economy by replacing the outdated 2011-12 base year.
• The relative shares of primary, secondary, and tertiary sectors in total Gross Value Added (GVA) at current prices during 2024-25 were 21.4%, 25.8%, and 52.9%, respectively.
• Refinements in the new series include segregation of multi-activity enterprises, use of industry-specific blown-up factors, comprehensive coverage of Limited Liability Partnerships (LLPs), and high-frequency data on GVA per worker.
• The new series expands the application of ‘double deflation’ and ‘volume extrapolation’ methods for estimating real GVA, aligning with international standards.
• Challenges remain in allocating national-level GVA of companies across states to derive Gross State Value Added (GSVA) due to limitations in the Annual Survey of Industries (ASI) frame.
• Addressing volatility in GVA per worker estimates from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) requires methodological improvements, such as a rotating panel design.
• Updating the ASI frame using MCA and GST databases and refining the ASUSE survey methodology can further improve GDP and GSDP estimates.

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.
• Double Deflation: A method used to calculate real GVA by separately deflating the value of output and intermediate consumption.
• Volume Extrapolation: A method used to estimate real GVA by projecting the volume of production using relevant indicators.

GDP vs GVA