• 24 Dec 2025 05:39 PM
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GDP data revision: The statistics ministry has issued detailed notes for growth sceptics to delve into

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India’s GDP revision next year has been preceded by discussion papers published by the ministry of statistics. This should cue debates on what India can reasonably expect to measure—and acquaint casual datasceptics with our challenges.

India's GDP revision next year has been preceded by discussion papers published by the ministry of statistics. This should cue debates on what India can reasonably expect to measure—and acquaint casual datasceptics with our challenges.

Following the release of two discussion papers by India's ministry of statistics outlining proposed methodological changes for the upcoming base-year revision of national accounts, there has been a renewed focus on our methodology for the GDP revision. The new base year will be 2022-23 and the revised series is scheduled for release in early 2026. They lay out, in great detail, what has changed in data availability and show improvements in methodology.

It is precisely for these reasons that they deserve attention. They do not settle our perennial and politicized debates about India's 'true' growth rates. Instead, they represent a significant step in how the statistical system explains itself to users, while also giving us the tools to understand what constraints remain.

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On the positive side, these revisions build on previous efforts and incorporate newer data available since the 2011 series to move away from blunt proxies and static ratios. On the production side, the expanded use of corporate filings (via MGT 7/7A forms filed with the ministry of corporate affairs), enables a more efficient allocation of value added across activities, rather than assigning multi-activity firms wholesale to a single dominant sector.

The use of India's Annual Survey of Unincorporated Sector Enterprises (ASUSE) and Periodic Labour Force Survey (PLFS) makes household sector estimates more dynamic than the practice of using proxies for growth on base-year estimates.

In the past, such simplifications were unavoidable; today, richer administrative and survey data permit more granular treatment. These changes will not lead to higher or lower growth, but will improve consistency.

The treatment of the government sector also illustrates the kind of desirable conceptual housekeeping the system needs. Long-standing approximations—such as pension outgo used as a proxy for current compensation—are being refined to reflect the evolving mix of old and new pension schemes. Similarly, the imputation of housing provided to government employees brings the Indian practice closer to international standards.

These changes affect output composition and levels in different directions, but are rooted in accounting logic and should have no bearing on macro narratives.

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We see similar changes on the expenditure side, where private consumption estimates are being revised using a broader mix of household surveys, administrative data-sets and commodity-flow methods. The shift towards updated consumption classifications improves comparability.

At the same time, reduced reliance on commodity flows addresses criticisms that consumption estimates were insufficiently grounded in observed household behaviour. Here again, the outcome will not necessarily flatter any particular story about demand, but it should better reflect the structure of consumption in a changing economy.

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A recurring theme in public debates on GDP concerns deflators and 'real' growth. Earlier controversies often conflated the choice of price indices with questions of intent.

The discussion papers, by contrast, move the system towards a better practice wherever the data permits it—most notably through the use of double deflation in manufacturing, where both output and input prices are available.

At the same time, they acknowledge that such methods cannot be applied universally, especially in services, where appropriate price indices remain scarce. This is not an Indian peculiarity; many developing countries face similar limitations. The critical point is that data constrains methodological choices and does not reflect a desire to engineer outcomes.

The discussion papers also help us assess what we cannot yet do and what the next round of reforms must focus on as we prepare for eventual alignment with the United Nations System of National Accounts (SNA) 2025 standard.

A significant limitation is our inability to systematically exploit GST data for national accounts. Despite the GST's richness and near-universal coverage, India still lacks a stable institutional and analytical framework to clean, link and interpret filings for national and regional accounts. Using GST filings would improve sectoral allocations even more than the proposed use of MGT7/7A.

Over time, building such a framework could materially enhance the quality and timeliness of quarterly GDP estimates. Converting experimental service price indices to regular official statistics would also reduce concerns about inappropriate deflators.

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A second frontier lies on the expenditure side: moving towards an annualized Household Consumption Expenditure Survey. This would significantly strengthen private consumption estimates, reduce reliance on indirect commodity-flow methods and improve coherence across production, expenditure and distributional statistics—what future SNA 2025-aligned revisions will demand.

Seen in this light, the most encouraging aspect of the exercise is not any single technical tweak, but the ministry's decision to place the methodology squarely in the public domain before implementation. By publishing discussion papers and inviting feedback, the ministry signals a willingness to engage with users, acknowledge trade-offs and document assumptions. This matters more than the precise numerical outcomes of the revision.

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India's GDP numbers will continue to be debated, as is inevitable in a large, diverse economy where statistics carry political and economic weight. But the quality of that debate should focus on institutions, data pipelines and methods, rather than treating every revision as a political outcome or a failure to deliver magical solutions.

The discussion papers mark a step forward, not because they don't provide unattainable 'final' answers, but because they move us towards a more informed and grounded conversation about what our national accounts can reasonably be expected to measure today as institutions evolve to support the next generation of statistics.

The author is a visiting professor at the Institute for Studies of Industrial Development and the Institute for Human Development and former chief statistician of India.