GDP revision a move in right direction, but questions remain: Sen

India’s new gross domestic product (GDP) series, with 2022-23 as the base year, has introduced major methodological changes — from double deflation to improved coverage of the informal sector and segregation of multi-activity firms.

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While the government has called this a step towards better accuracy, former chief statistician of India, Pronab Sen, says the changes warrant careful scrutiny. Ina video interview with Abhijeet Kumar, Sen talks about what changes matter, where doubts remain, and what ordinary citizens should take away. Edited excerpts:

= The issue of double deflation is important. This means you are using different price indices to deflate inputs and outputs. Earlier, we used single deflation, with the price of the final product being used to deflate the whole value added. Here, you are not doing that.

To my mind, it is an internationally accepted methodology. However, this creates a problem because you will only see the price of the final product. You will see a difference between the deflator used for output and the deflator used for value added. It is very difficult to figure out what that means.