India's new GDP series: Shaping key decisions in a data-driven era

The gross domestic product (GDP) numbers on new base year 2022-23 have been released by the Ministry of Statistics and Programme Implementation (Mospi). The numbers suggest that the economy has maintained robust growth even at a revised base with average real GDP growth of more than 7 per cent for 2023-24 to 2025-26 and average growth of more than 9 per cent in nominal GDP for the same period.

 

According to the second advanced estimates for FY26, the real GDP has grown by 7.6 per cent with nominal GDP growing by 8.6 per cent.

 

The significance of these figures becomes even more striking when viewed against the backdrop of numerous methodological changes and use of new data sources in the base revision exercise. Among others, adoption of more refined methods of deflation and integration of richer data sources such as annual survey findings and expansive administrative datasets have helped capture the economy’s evolving dynamics more clearly. This also matters in light of the widespread interest in India’s GDP methodology, which has frequently driven discussions about the performance of the economy.

 

The revised GDP numbers tell more than just statistical numbers; they quietly reflect how various government initiatives are translating policies into tangible sectoral impact advancing the broader vision of Viksit Bharat@2047.

 

The manufacturing sector registering an average growth of 11 per cent in the years 2023-24 to 2025-26 offers a clear illustration of how improved methodologies like use of double deflation and adoption of new data sources has enabled better capturing of the true momentum of the sector — a momentum that the government is actively driving through various schemes, including the production-linked incentive (PLI) scheme.

 

In the new series, the rise in the contribution of agriculture to value added is inter alia driven by reduction in the diesel usage and capturing the contribution of high value fruits and vegetables. These are welcome signs indicating lower cost pressures, government-driven adoption of solar power by farmers and a policy-driven shift towards higher value-added agriculture, strengthening farm profitability and improving farmer’s income.

 

Use of new survey data like Annual Survey of Unincorporated Sector Enterprises (ASUSE) and Periodic Labour Force Survey (PLFS) have reshaped the GDP estimates, mainly in the informal sector dominated service sectors, like trade, transport and other services where earlier calculations for such enterprises relied on benchmark-based estimates instead of direct estimates.

 

For instance, the trade, hotels, transport and communications sub-sector, registered an average three-year growth of 9 per cent in 2023-24 to 2025-26. This is partly a reflection of better data use, as surveys like ASUSE and PLFS now allow informal sector and worker productivity to be seen more clearly, uncovering existing trends. Similarly, use of updated data sources has captured the rise in the ownership of dwellings reflecting the positive outcomes of the government’s affordable housing schemes.

 

GDP estimation has benefitted from new digital data sources, many of which have been made more accessible through government initiatives like ‘Digital India’. Databases such as e-Vahan, MGT-7 corporate returns, GST data and the Public Financial Management System (PFMS) are now directly feeding into the national accounts. GST data has particularly sharpened quarterly estimates and will improve state-wise allocations. The result is a more robust and internally consistent system of GDP estimation. This also exemplifies a whole-of-government approach, where administrative data is being leveraged in new ways to enhance the precision of GDP estimation.

 

Not only for GDP, the ministry is pursuing a broader goal of creating an enabling environment to enhance the use of administrative data for evidence-based decision-making across the country. Key efforts focus on improving data quality, comparability, and interoperability, with close coordination with States to ensure consistency and effective use at both national and sub-national levels.

 

In an era of data-driven decision making, sub-national data is crucial for understanding local economies and guiding targeted policies. This has led to increased focus on robust estimation of GDP at the State and district level, for which technical support is already provided to states. In addition to this, provisions have been made in the present sample surveys to enable generation of district-level estimates by the states/UTs. These robust sub state level survey estimates under ASUSE and PLFS will further strengthen the accuracy of State/Sub-State GDP measurement, providing a more detailed and comprehensive view of the economy at sub-national levels.

 

As a major step in empowering states with robust and reliable economic information, the estimates under ASUSE and PLFS will also be generated for million-plus cities. Also, use of data from the upcoming All India Survey of Incorporated Services Sector Enterprises (ASISSE) and GST data will further strengthen the sub national accounts.  

 

The base revision has laid the essential groundwork, bringing many improvements and strengthening the foundation of our statistical system. Yet, this is just the beginning of a transformative journey, as the system evolves through initiatives on the horizon, like new statistical products and harmonisation of administrative datasets. Together, these efforts are driving the evolution of a dynamic, responsive, and forward-looking statistical System, equipping policymakers with timely, reliable, and actionable insights.

 

The writer is secretary, Ministry of Statistics and Programme Implementation