NEW SERIES OF GROSS DOMESTIC PRODUCT (GDP) ESTIMATES WITH BASE YEAR 2022-23

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The Ministry of Statistics and Programme Implementation (MoSPI) is releasing the New Series of Annual and Quarterly National Accounts Estimates with base year 2022–23, which replaces the previous series with base year of 2011–12. As per the International best practices, base year revision is undertaken periodically and differs from regular revisions in National Accounts primarily because of nature of changes. In Annual revisions, changes are made only on the basis of updated data becoming available without making any changes in the conceptual framework or using any new data source, to ensure strict comparison over years. In case of base year revisions, changes are made to: 

➢ Capture structural changes in the economy 

➢ Incorporate latest data sources 

➢ Improve estimation methodologies 

➢ Enhance coverage and accuracy 

The Financial Year (FY) 2022–23 has been selected as base year, as it represents a recent normal year (after COVID), with availability of robust and comprehensive data across sectors of the economy, making it an appropriate benchmark for the new series of Annual and Quarterly National Accounts Estimates.

KEY IMPROVEMENTS IN NEW GDP SERIES (BASE YEAR 2022-23) 

➢ Segregation of Activities in Multi-Activity Enterprises: Improvement in the compilation of Private Corporate Institutional Sector by segregating of activities in multi-activity enterprises. 

➢ Improved coverage of Unincorporated Sector using annual survey data to capture dynamics on regular basis 

➢ Adoption of Double Deflation and Volume/Single Extrapolation: Use of Double Deflation in Agriculture and Manufacturing sector. Use of Volume/Single extrapolation in remaining sectors. 

➢ Improved Benchmarking method for Quarterly National Accounts Series: Proportional Denton Benchmarking method has replaced the Pro-Rata method of benchmarking in previous series. 

➢ Incorporation of Updated Rates and Ratios from Recent Surveys and Studies: Updated rates and ratios are drawn from various surveys, as well as from methodological studies undertaken by MoSPI in collaboration with various expert institutions. 

➢ Extensive Use of GST and Various new Administrative Data sources for Quarterly National Accounts. 

➢ Improved estimates of Private Final Consumption Expenditure (PFCE) by adopting Classification of Individual Consumption according to Purpose (COICOP) 2018 classification and incorporating Survey and various Administrative data sources 

➢ Reduced Discrepancy through SUT Integration: Better synchronization between Production and Expenditure side estimates by integrating the compilation with Supply and Use Table framework

KEY HIGHLIGHTS OF NEW GDP SERIES (BASE YEAR 2022-23) 

➢ Real GDP has been estimated to grow by 7.6% in FY 2025-26. Nominal GDP has witnessed a growth of 8.6%. These growth rates are revised upward from their respective First Advance Estimates computed using previous Base Year (2011-12). 

➢ Overall Economic performance in FY 2025-26 is primarily on account of robust Real growth observed in Second Quarter (8.4%) and Third Quarter (7.8%). 

➢ The Economy has exhibited sustained performance, recording Real GDP growth rates of 7.2% and 7.1% respectively during FY 2023–24 and FY 2024–25. 

➢ Nominal GDP has registered 11.0% and 9.7% growth rates during FY 2023–24 and FY 2024–25 respectively. 

➢ Manufacturing sector has been the major driver in contributing to the resilient performance of the economy in consecutive 3 financial years after rebasing. This sector has attained double digit growth rates in FY 2023-24 and FY 2025-26. 

➢ Secondary and Tertiary sectors have boosted the performance of the economy by registering above 9.0% growth rate in FY 2025-26. 

➢ ‘Trade, Repair, Hotels, Transport, Communication & Services related to Broadcasting, Storage’ sector has attained a growth rate of 10.1% at Constant Prices in FY 2025-26. 

➢ On the Consumption side, both the Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) have exhibited more than 7.0% growth rate in FY 2025-26.

Summery of Improvements in New Series:

The methodological improvements in new series of National Accounts has been a crucial step in aligning with structural changes for achieving the long-term vision towards Viksit Bharat. Details of improvements in the new series are documented in discussion papers, one each on ‘Production Approach’, ‘Expenditure Approach’ and ‘Quarterly GDP & Sub-national Accounts’ released by the Ministry. These discussion papers are available on the website of the Ministry. Some of the major improvements in the new series are summarized below:

  • Increased dynamism in measuring household sector: In the old series, household sector was estimated either through inter-survey growths or through some proxy indicators. In the new series, level estimates of the household sector will be compiled through regular surveys – Annual Survey of Unincorporated Sector Enterprise (ASUSE) and Periodic Labour Force Survey (PLFS) - being conducted each year.
  • Use of Double Deflation or Single Extrapolation: In the new series, double deflation will be used in manufacturing and agriculture industries and single extrapolation elsewhere. As such single deflation has been completely done away with. Besides, deflators will be used at a more granular level.
  • Lower Discrepancy: Supply Use Table Framework will be integrated with National Accounts Framework to minimize the discrepancy between GDP from production and expenditure approaches. SUT shows what industries produce (Supply) and how products are used by industries or final consumers (Use). Balanced SUT ensures that total supply matches total demand in the economy. So, integration of SUT framework with National Accounts Framework will help minimize discrepancy in new series.
  • Use of updated rates/ratios from various studies and surveys: Rates and ratios used in compilation will be revised in new series either from surveys which have come up in the intervening period or through studies conducted by MoSPI in collaboration with other expert organizations.
  • Segregation of activities in case of multi activity private corporations: In the old series, total value added of multi activity enterprises was allocated to the major activity. However, as administrative data has become available in the intervening period, where corporations are mandated to report activity-wise share in turnover, the same will be used to segregate the total value added (and other aggregates) in different activities.
  • Private Final Consumption Expenditure (PFCE): In the new series, estimation of PFCE is more nuanced through use of mixed approach (a) enhanced use of Household Consumer Expenditure Survey (b) Direct estimation based on production and other data sources (c) Commodity flow approach. Besides, latest relevant standard i.e. COICOP 2018 has also been adopted in compilation of PFCE.
  • Use of new data sources:  Digitization of records has led to accessibility of new and more granular database in a digitized form. New data sources like Goods and Services Tax (GST) data, Public Finance Management System (PFMS), E-vahan etc., which are more comprehensive and available at a shorter time lag, have been explored for augmenting the existing data sources for compilation and corroboration of estimates.

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