New GDP data series from today: What are the top changes in the methodology? FAQs answered

New GDP series: FAQs answered

The Gross Domestic Product or GDP data for the third quarter of the current financial year 2025-26 is set to be released later in the day today. This will be the first GDP data based on the new series that the Ministry of Statistics and Programme Implementation has adopted. India is the world’s fastest growing major economy, on its way to become the third largest economy in nominal GDP terms in the coming years. The new series of data not only revises the base year for calculation purposes to 2022-23, it also incorporates several vital changes with an aim to give a more accurate measurement of the size of the Indian economy and its real and nominal GDP growth. What changes in the new GDP data series? Below is a list of FAQs shares by the Ministry of Statistics and Programme Implementation:

New GDP Series: Frequently Asked Questions Answered

1. What is Gross Domestic Product? Gross Domestic Product, which is commonly known as GDP, is the value of final goods and services produced in the domestic economy in an accounting period. In order to assess the change in economy from one period to another in a meaningful manner, it is important to ensure that same measurement methods and data sources have been used for both the periods.2. What is a base year with reference to National Accounts? What is rebasing exercise? What is the importance of this rebasing exercise carried out by MoSPI?The base year in National Accounts Statistics is the reference year whose prices are used to calculate real growth.Rebasing refers to a process of updating base-period benchmarks with new updated statistics to arrive at a new economic structure that will serve as the basis for estimating gross domestic product and its components, consumer price index and index of industrial production, moving forward. Methodology and data sources used in compilation of GDP and other macro-economic indicators for a particular series are finalized at the time of base year revision and continue for all subsequent years till the base year is revised again.The base year is updated from time to time to reflect the changes that have happened in the economy over the years. This helps make economic data more accurate. It also allows the use of new data sources and better methods for calculating estimates. 3. What is the frequency of base year revisions undertaken by MoSPI? Under normal conditions, it has been MoSPI’s endeavor to revise the base year periodically in five years, as per international recommendation. 4. Why is the GDP base year being revised to FY 2022-23?The base year of the national accounts is being revised from 2011-12 to 2022-23. MoSPI’s endeavour has been to revise the base year every five years. However, year between FY 2017-18 to FY 2021-22 were not suitable as base year: ● FY 2017-18:There was major change introduced namely, GST. This required time for consolidation. ● FY 2019-20 and FY 2020-21 were impacted by the COVID-19 pandemic. ● FY 2021-22 witnessed sharp GDP growth largely due to the base effect of post-COVID recovery, making it unsuitable. After detailed discussions, the Advisory Committee on National Accounts Statistics recommended 2022-23 as the new base year. The Committee includes members from various Central Ministries and Departments, State Governments, Academia and Research Institutions. The Committee found FY 2022-23 to be a normal economic year, and important survey data needed for estimating national income was also available for this year. 5. In the new GDP series, for how many years will the back-series data be provided for? By when can we expect it? On 27 February, 2026, both the annual and quarterly estimates for the year 2022-23 to 2025-26 will be released. Back series data is expected to be released by December 2026. As per the practice, in India, back-series estimates are recalculated using revised methodology of the new GDP series up to the previous base year. After that, the data is linked at a disaggregated level and extended back to 1950-51. However, the final method for preparing the back-series will be decided in consultation with the Advisory Committee set up to guide MoSPI. 6. How comparable will the revised GDP series be with international statistical standards such as the UN System of National Accounts? India prepares its GDP estimates according to the 2008 System of National of Accounts (SNA 2008), which is a globally accepted standard. The United Nations Statistical Division (UNSD) is now moving from SNA 2008 to SNA 2025. Countries are expected to adopt a new standard during 2029-30. India plans to shift to SNA 2025 in its next base year revision. Besides, India is also a subscriber of IMF’s Special Data Dissemination Standard (SDDS), which indicates that the country meets all the tests of good statistical citizenship. The revised series is in sync with the international statistical standards.7. Is MoSPI planning to release a detailed document on methodology and data sources used in the new series? Yes. Methodology and data sources used in compilation of estimates will be presented comprehensively in MoSPI’s publication ‘Sources and Methods’. The publication is scheduled to be released in the next few months.8. What new data are being incorporated in the new GDP series?Several new and improved data sources are being used in the new GDP series to make the estimates more accurate and reliable.Measurement of the Household Sector:Earlier, the household sector was estimated using growth rates between surveys or proxy indicators. In the new series, actual level estimates are being prepared using regular annual surveys such as Annual Survey of Unincorporated Sector Enterprise (ASUSE) and Periodic Labour Force Survey (PLFS). These surveys will measure the dynamism in the household sector more accurately and regularly. GST data will also be used to cross-check the estimates obtained from other data sources.

9. What are the major methodological changes in the new GDP series? The major methodological improvements include:

10. From where details of improvements listed above can be accessed? Advisory Committee on National Accounts Statistics (ACNAS) was constituted in 2024 to suggest MoSPI, among other things, on issues such as methodological improvements, incorporation of new data sources etc. Five sub-committees were constituted under ACNAS to simultaneously deliberate on specific subjects. 56 experts who were members of these committees deliberated in 40 meetings during the past two years on these issues. The details of above-mentioned improvements are available in the reports of three sub-committees dealing with all-India estimates, which are available on the website of the Ministry. Report of the Sub-committee on Regional Accounts and Sub-committee on SNA Update will be released later. 11. What measures have been taken in the new series to capture India’s household sector more comprehensively?In the old series, the household sector was estimated for the base year using the Survey on Unincorporated Sector Enterprises and the Employment Survey. For later years, estimates were made by extrapolating the base year using growth between surveys or proxy indicators.In the new series, however, actual level estimates of the household sector are being prepared each year using regular surveys such as Annual Survey of Unincorporated Sector Enterprise (ASUSE) and Periodic Labour Force Survey (PLFS). This approach allows the household sector to be measured more accurately and dynamically, eliminating the need for extrapolation from the base year. 12. Is the contribution of the hired domestic workers (like cooks, drivers, persons cleaning households, etc.) by the households included in the estimation of GDP? Yes, such activities are termed as the “activities of households as employers of domestic personnel” and their contribution is included in the estimation of the GDP. The estimation is based on the number of such workers and their wages as available from the annual PLFS data. 13. How will the revised base year improve measurement of newer sectors like digital services, platform economy, gig workers etc.? All economic activities, including digital services and intermediary platforms etc. were already covered through MCA-21 data for the corporate sector.In the 2022-23 series, with availability of two annual surveys namely, ASUSE and PLFS, the contribution of GDP of these sectors in the household sector (like unincorporated small businesses, self-employed people, informal economic work, etc.) is being more accurately captured annually through these survey-based estimates. ASUSE has dedicated economic activity codes to capture gig workers, such as drivers operating under aggregators (like Ola, Uber, etc.) and delivery service activities (like Zomato, Swiggy, etc.). All economic activities is being captured more comprehensively in the new series.14. Does the new series comprehensively resolve the persistent concerns regarding the accuracy of the GDP deflator?Yes. An advisory Committee was set up to guide the base revision of GDP. A sub-committee specifically examined issues related to deflators. As per the recommendation of the Committee, in the new series, single deflation has been completely eliminated. In fact, double deflation is being applied in sectors like manufacturing and agriculture. In other sectors, single extrapolation is being used. Deflators are being applied at a more detailed, granular level. These changes are expected to improve the accuracy and reliability of GDP deflators in the new series.15. Is MoSPI still using the WPI with 2011-12 base year in calculating GDP estimates in the new series? Will the ministry use the PPI prepared by DPIIT in the new GDP series?The base year revision of WPI is still in progress. Until the updated WPI becomes available, the existing WPI will continue to be used as a deflator. However, it is important to note that the method of use of WPI has undergone change in new series compared to the old series. In the new series, WPI is used at granular level. Separate item-level WPI for output and intermediate consumption are used in Manufacturing sector. Adoption of double deflation in manufacturing sector will enable improved measurement of its GVA estimates compared to old series where same WPI was used for both output and input items. Using WPI at the item level also avoids distortions caused by changes in weights when aggregating across items and sub-categories. Additionally, the Ministry plans to incorporate the PPI in the near future once it is officially released by the DPIIT.16. What is Supply and Use Table Framework?The supply and use tables describe how products (goods and services) are brought into an economy (either as a result of domestic production or imports from other countries), and how those same products are used (as intermediate consumption or as final consumption by households, nonprofit institutions serving households (NPISHs), general government or as gross capital formation or as exports). The supply and use tables provide a powerful framework to balance and integrate all the components of the production, income and expenditure approaches to measuring GDP. 17. What is Supply and Use Table Framework?The supply and use tables describe how products (goods and services) are brought into an economy (either as a result of domestic production or imports from other countries), and how those same products are used (as intermediate consumption or as final consumption by households, nonprofit institutions serving households (NPISHs), general government or as gross capital formation or as exports). The supply and use tables provide a powerful framework to balance and integrate all the components of the production, income and expenditure approaches to measuring GDP. 18. Why does this discrepancy arise in data? Discrepancies occur because of differences in data coverage across sources, time lags in when information becomes available, use of proxy data for advance estimates, and different estimation methods. 19. What are the SNA recommendations to handle this discrepancy?As per the System of National Accounts 2008 (SNA 2008) and continued in System of National Accounts 2025 (SNA 2025), the following recommendations are made for handling statistical discrepancy in GDP estimates: i) The statistical discrepancy may be explicitly shown and published alongside official GDP estimates. This enhances transparency enabling users to clearly understand the statistical difference instead of adjusting the estimates to force equality. ii) Another approach is to reconcile the Production/Income and Production side estimates by borrowing strength from Supply and Use Table (SUT) framework. 20. How will the discrepancy be adjusted in the new GDP series?In the new GDP series, the Supply and Use Tables (SUT) framework is being used to reconcile differences between production and expenditure estimates. The SUT framework applies the product-balancing principle, providing a robust way to align divergent data and ensure consistency across all sectors. By integrating SUT framework into GDP compilation, discrepancies in the Final Estimates is being resolved, resulting in internally consistent GDP estimates. 21. Are institutional sector wise estimates compiled and what are the data sources used in compilation of institutional sector wise estimates?Following SNA 2008, the economy has been divided in the following institutional sectors: i. Non-Financial Private Corporations Sector: by using the data on their annual profit & loss account and balance sheet etc. from Ministry of Corporate Affairs (MCA) ii. Financial Corporations Sector: by using the data of the financial companies, regulators (SEBI, RBI, IRDAI etc.) on the profit & loss account and balance sheet etc. iii. General Government Sector: by using the budget documents of Central and State Governments and PFMS data on the expenditure. iv. Household Sector: for agriculture, using the data on production of crops from the Ministry of Agriculture & Farmers welfare and the price data of the crops from the State/UT Governments, the animal husbandry and fisheries related data from the respective Ministries, for construction sector using the data on different commodities used in the industry from different sources and for the remaining sectors by using the annual surveys conducted by NSO, MoSPI, namely, ASUSE and PLFS. v. Non-Profit Institutions Serving Household (NPISH) Sector: Presently, in India, the estimates for NPISH are included in the Household Sector using the survey data. Estimates for each industry are prepared by institutional sector. For the Household Sector, industries such as Agriculture, Construction, and Ownership of Dwellings use a different methodology than other industries. Detailed explanations of these methods are available in the relevant discussion papers and sub-committee reports. 22. What are the major data sources to compile the estimates of General Government Sector? How the estimates of General Government sector are compiled?The main data sources for the General Government sector include: Central and state governments budget documents (e.g., receipt budget, detailed demands for grants of all Ministries/Departments), annual accounts of local bodies and autonomous institutions. As government provides services on non-market basis, output of this sector is valued by the sum of the costs incurred in their production, namely, as the sum of Compensation of Employees (CE), Intermediate Consumption (IC) and Consumption of Fixed Capital (CFC). The basic identities in this case are:

23. What major changes have been incorporated in the estimation of General Government Sector in the new series? Some of the major improvements incorporated in estimation of General Government in the new series are as follows:

24. What methodological improvements have been introduced in quarterly GDP estimation under the new base year 2022–23? Under the revised base year (2022–23), the quarterly GDP estimation framework has been strengthened through important methodological improvements, most notably the shift from the earlier Pro-Rata benchmarking method to the Proportional Denton method. The new benchmarking method will remove artificial discontinuities, commonly known as the “step problem,” and ensures smoother and more consistent quarterly series that better reflect underlying short-term movements in economic activity.25. What new or expanded data sources are being used in quarterly GDP compilation?The new series makes wider and more systematic use of GST data across manufacturing and non-financial services sectors. Outward taxable supply made in the course of business, are comprehensively covered in GST data. Growth in Outward taxable supply for concerned institutional sector of various economic activities is being used as high frequency indicator in compilation of quarterly estimates. FISIM-based approach has been adopted for Financial Services at the quarterly level. Estimation methods for Product Taxes and Subsidies have been strengthened using improved volume indicators, and method for estimating Gross Fixed Capital Formation and Trade in Services at quarterly level are more aligned to the annual approach. In addition, deflation practices have been improved by moving from aggregate deflators to item-level and sector-specific price indices, with greater use of appropriate indices such as CPI, WPI, Unit Value Indices, and service-specific deflators depending on sectoral characteristics.26. How has alignment between quarterly estimates and Annual National Accounts been strengthened?The revised quarterly compilation framework has been aligned more closely with the Annual National Accounts methodology in terms of sectoral classification, deflation strategies, and estimation practices. This harmonisation ensures greater consistency between quarterly and annual GDP and GVA estimates. Also, new benchmarking method adopted in quarterly series will strengthen consistency with annual national accounts series. 27. What sector-specific refinements and improvements in deflation practices have been introduced in Quarterly National Accounts? Several sector-specific refinements have been introduced in deflation method. Double deflation is adopted for Manufacturing sector against the previous practice of single deflation. Under this approach, outputs and inputs are deflated separately using their respective price indices leading to more accurate measurement of real growth of manufacturing sector. Further, deflators such as CPI, WPI, Unit Value Index, etc is being used at more granular level by moving from aggregate level in old series to item-group level in new series. Further, new series of CPI is considered and new series of WPI/PPI is being adopted whenever released in near future. 28. How are the quarterly GDP estimates calculated? NSO, MoSPI calculates the quarterly GDP estimates using Benchmark-Indicator and this is astandard method used worldwide following the SNA 2008 and IMF’s Quarterly National Accounts Manual 2017. The method works as follows:

Benchmarking to annual estimates ensures temporal consistency. High frequency indicators are applied on the benchmark estimates to derive the estimates. Due to divergence of data sources of indicators and the annual estimates in terms of definition and coverage, quarterly estimates are inherently prone to revision. In the new series, adoption of proportional Denton benchmarking enhances, incorporation new data sources and increased granularity and better deflation strategy is likely to institute more stability and robustness of estimates. 29. Whether previously released estimates and quarterly growth rates in the new series will undergo change?Yes. As the base year is being changed and the method of calculation is being updated like adding new indicators, using more detailed data, and better ways to adjust for inflation, etc. The annual and quarterly estimates for the years 2022-23 to 2025-26 as per base year 2022-23 will be released on 27 February 2026. 30. What is the role of MoSPI in Gross State Domestic Product (GSDP) Estimation? NSO, MoSPI issues the guidelines for estimating the GSDP estimates and helps the States and the Union Territories (UT) to estimate their own Gross State Domestic Product (GSDP) in a consistent way by providing the guidance and advice following uniform definition, concepts and methodology. The Directorates of Economics and Statistics (DES) of the States/UTs compiles their GSDP using their State/UT-specific data from the same data sources mostly. 31. When the GSDP series with new base is expected? When the national GDP base year is updated by NSO, MoSPI, the State/UTs also update their GSDP base year to match. This keeps the State/UTs’ GSDP estimates consistent with the national estimate. After the GDP with the updated base year 2022-23 is released, NSO, MoSPI will inform the States/UTs about the methodological changes or improvements in the way GSDP is calculated. 32. What major methodological improvements are made in estimation of GSDP during a new Base Year revision?Major methodological improvements include: (i) reduction in allocation-based methods in favour of direct estimation for some sectors or sub-sectors, (ii) reduction in reliance on fixed ratios and proxies, (iii) improved use of State-wise information of economic activity, (iv) greater methodological consistency across States. 33. How the GDP estimates impact the lives of the common citizens? GDP estimate is not only a macro-economic indicator, it is a significant part of the human development at national level. GDP provides contribution of various sectors in the economy and helps formulate appropriate policies, which helps people including farmers, small businesses, manufacturers and service enterprises. For example, earlier, in agriculture, more emphasis was on production of crops like paddy, wheat etc. GDP estimates provide crop wise production figures. Now enhanced focus is being provided for growing of fruits, oilseeds, pulses, fisheries sector etc. Similarly, enhanced emphasis is being provided to the manufacturing sector by the Government. In addition to this, the investment decisions, capacity to take loan etc. are also influenced by the GDP estimates. Thus, it plays a very important role in every citizen’s lives.