India's GDP Growth Revisions Are Routine and Not Eyebrow-Raising

We should, however, refine data collection further, incorporate alternative data sources and accelerate statistical releases

- T.C.A ANANT

The National Statistical Office (NSO) recently released the first revised estimates of India's gross domestic product (GDP) for 2023-24, revising the GDP growth rate at constant prices from the earlier provisional estimate of 8.2% to 9.2%. This revision, which brought annual growth to one of the highest levels in the post-covid period, sparked considerable debate in the media as well as on social media over India's data quality and statistical governance. Surprisingly, even well-informed commentators demonstrated a lack of understanding about the reasons behind variations in GDP estimates.

This article explains the factors contributing to these revisions in National Account estimates and explores possible improvements in future GDP series.

GDP revision patterns: To put the discussion in perspective, it is useful to examine the pattern of GDP revisions under the current (2011-12) series, as shown in Table 1. The data indicates that revisions have historically occurred in both upward and downward directions. The most significant changes typically take place between the provisional estimates and first revised estimates and between the first and second revised estimates.

Why do GDP revisions occur?: GDP revisions result from changes in data availability. Table 2 outlines the key data sources and their availability timelines for GDP computation.