GDP series revision: Vast improvements, but concerns remain

GROSS DOMESTIC PRODUCT (GDP) is a measure of the aggregate value of goods and services produced within an economy in a given period.

- PC MOHANAN

The coverage of what constitutes production and the methods to assess productive activities is a complex task.Since large parts of the required data are not available annually, it becomes necessary to use indicators to project base year numbers for many activities in subsequent years. Changes in methodologies and improvements in data measurement lead to overhauling GDP estimates at regular intervals.

Such revisions usually change the level of GDP and its sectoral shares. The conceptual basis for GDP is contained in the UN supported recommendations commonly called the System of National Account (SNA). This framework contains a set of tables covering the entire gamut of economic production, consumption and expenditure and most countries follow it now. The most recent SNA version is the 2025 one, which addresses issues such as digitalisation, globalisation, the informal economy and sustainability, keeping the SNA 2008 as the core framework.

The significant shift in the data sources and the adoption of SNA 2008 framework for the 2011-12 GDP series had generated critical debates on the GDP numbers when these were released in 2015. One of the major changes was the incorporation of the corporate sector data from MCA21 filings in instead of the RBI study on company finances. Apart from this, several new datasets including improved local level body data formed the basis for the 2011-12 series.