The Ministry of Statistics and Programme Implementation (MoSPI) on Friday said the base year change for GDP computation will help capture evolving economic realities, improve coverage, enhance accuracy, and reduce statistical discrepancies.
Among the improvements is the segregation of activities within multi-activity enterprises, allowing for more precise measurement of output in the private corporate sector. Coverage of the unincorporated sector has also been strengthened through regular use of annual survey data, enabling better representation of household enterprises and informal activities, including previously under-represented contributions such as hired domestic workers.
Beyond Proxies
MoSPI Secretary Saurabh Garg said that the ministry was using different indicators for the informal sector earlier, but now it is resorting to the Annual Survey of Unincorporated Sector Enterprises and the Periodic Labour Force Survey, which are more granular and will capture informal sector activities more effectively.
Private Final Consumption Expenditure (PFCE) estimates have been refined by adopting the Classification of Individual Consumption According to Purpose 2018 framework and integrating additional survey and administrative information. Discrepancies between the production and expenditure approaches have been significantly narrowed through tighter integration with the Supply and Use Table (SUT) framework. These combined enhancements are intended to better reflect structural changes such as digitalisation, formalisation, the expansion of platform and gig economies, and shifts in consumption patterns.
Technical Precision
A major shift in deflation methodology has been implemented, with double deflation now applied to the agriculture and manufacturing sectors to account separately for price movements in inputs and outputs, thereby producing more reliable volume measures of growth. In other sectors, volume extrapolation or single deflation is used, supported by more granular price deflators overall. For quarterly estimates, the MoSPI has adopted the proportional denton benchmarking method, which replaces the earlier pro-rata approach and delivers more consistent time series.