India’s new GDP series is an upgrade but it leave a few questions on the economy unanswered

Last week, India’s statistics ministry released its first estimates of gross domestic product (GDP) and other associated national accounts data with 2022-23 as the base year for a new GDP series. This is the second major economic indicator after the consumer price index (CPI) to have seen a base revision. Both these indicators had been using 2011-12 as base year, rendering them more than a decade old.

But similar to the CPI revision, the one in the national accounts is also not just a technical re-basing. It also makes several methodological changes and uses new as well as revised sources. Besides using new data-sets, the two national surveys by the National Statistical Office (NSO) and administrative data from several ministries, the new series also uses revised rates and ratios for arriving at estimates of gross value added (GVA).

The use of outdated rates and ratios had been a long-standing criticism of national account estimates. Hence, revising them to recent years is likely to improve the quality of the data. Among the new datasets that the revised series relies on are the Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE).

Both of these are now carried out annually, which not only improves estimates in the base year but also future estimations. Their use is also important given the country’s large informal sector. The availability of these surveys helps capture a better picture of activity in the unorganized sector, compared to the earlier series.