Deflators, discrepancies, data sources: GDP set to get updated, Pg16

Key Highlights:

• The Ministry of Statistics and Programme Implementation (MoSPI) is set to release the updated GDP data series with a new base year of 2022-23 on Friday.
• The current GDP series, which uses 2011-12 as the base year, was released in January 2015.
• The new series will include GDP data for October-December 2025, the Second Advance Estimate for 2025-26, and revised data for the first two quarters of 2025-26.
• Annual and quarterly GDP data under the new series will be released for 2022-23, 2023-24, and 2024-25.
• A back series showing GDP data before 2022-23 based on the new GDP series is expected by December 2026.
• The new series will discontinue the single-deflator method, using deflators at a more granular level for accurate real GDP growth measurement.

Detailed Insights:

• The revision of India’s GDP data aims to provide a more accurate representation of the Indian economy's structure, considering the rise of digital sectors like e-commerce.
• The International Monetary Fund (IMF) retained its 'C' grade for India’s GDP data in December 2025 due to the continued use of 2011-12 as the base year.
• The updated GDP series will incorporate new data sources and surveys such as GST, e-Vahan, the Annual Survey of Unincorporated Sector Enterprise, and the Periodic Labour Force Survey.
• Integrating national accounts data with Supply and Use Tables aims to minimize discrepancies between GDP measured by production and expenditure approaches.
• Methodological changes in the GDP series can lead to revisions in growth rates, as seen in the 2015 revision, which raised questions among economists, including the Reserve Bank of India (RBI).
• The new series addresses concerns that previous real GDP growth figures were overstated due to the use of the single-deflator method.
• The Advisory Committee on National Accounts Statistics (ACNAS) and its sub-committees held over 40 meetings over two years to guide the GDP revision process.

Key Concepts Involved:

• GDP: The total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.
• Base Year: The year used as a reference point for comparison in statistical data, particularly in calculating real economic growth.
• Deflator: An economic measure used to convert nominal GDP into real GDP, accounting for the effects of inflation.