Improve GDP measurement for a well-rounded view of India's rise

Aligning our national accounts with UN suggestions will help us track natural resources and income distribution far better

- T.C.A. ANANT

The United Nations Statistical Commission adopted the System of National Accounts 2025 (SNA 2025) earlier this year. The changes incorporated reflected much of the discussions around GDP and National Accounts since 2008, starting with the Stiglitz-Sen-Fitoussi Commission in 2008. These changes are more than a tweak to the statistical framework. They signal an acknowledgment of the importance of debates around inequality and the environment.

For decades, GDP has been the lodestar of economic progress. But GDP tells us little about what is happening to our natural wealth or how that income is distributed among households. The 2025 revision makes both these blind spots harder to ignore.

For India—with its ambition of becoming a developed nation by 2047—this is not an arcane statistical matter. It is a chance to place sustainability and inclusiveness at the core of how we narrate our economic story. And, importantly, India is not starting from scratch; over the past 15 years, across two different governments, the country has built an impressive foundation that aligns closely with the directions now formalized in SNA 2025.

Counting the natural resources we deplete and what we create: The new framework's most significant change is the treatment of natural resources. For the first time, depletion of subsoil resources like coal, iron ore, oil and gas is explicitly recorded as a cost of production, rather than just a decline in asset stock. This means that if India extracts coal or iron ore, the value of the depletion will directly reduce net domestic product (NDP), which measures economic output by subtracting depreciation on assets from gross domestic product (GDP).