Fundamental Shift in Economic Measurement: MoSPI Proposes Using Digital Tax Data and Annual Surveys for Granular GVA Estimates in New 2022-23 Base Series.
SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Institutions: Ministry of Statistics and Programme Implementation (MoSPI) | Reserve Bank of India (RBI) | NITI Aayog
The Ministry of Statistics and Programme Implementation (MoSPI) is undertaking a major revision of India’s National Accounts Statistics (NAS), shifting the base year from 2011-12 to FY 2022-23. This new series is scheduled for release on February 27, 2026. This discussion paper outlines critical methodological improvements adopted for the compilation of aggregates using the Production/Income Approach in both nominal and real terms.
Key Improvements by Institutional Sector
Non-Financial Private Corporations (NFPC) Sector: The calculation of Gross Value Added (GVA) for large private businesses (NFPC Sector) is becoming much sharper. Instead of relying on a single major activity, the new system uses digital tax filings (MCA-21 data) to split the company’s GVA accurately across every single business line. Scaling up for non-reporting companies is now done at a highly granular level (’Industry x Size class’). Limited Liability Partnerships (LLPs) are being counted comprehensively for the first time.
General Government Sector (GGS): The valuation of services provided by the government (its Output/GVA) is improved.
Pension Adjustment: For the Old Pension Scheme (OPS), which is a defined benefit plan, the value of pension payment included in the Compensation of Employees (CE) will now taper off proportionally to the number of serving employees remaining under OPS (using a 39-year service factor). This corrects the previous use of annual pension outgo as a proxy.
Imputation for Accommodation: The new series now accurately imputes the value of the housing service provided by the government to its employees. This means statisticians estimate the cost of providing that housing service (what it would cost the government to produce or rent) and add that amount to the employee’s compensation package. This ensures the output of the GGS accurately reflects the full cost and value of services delivered.
Real Growth Calculations::
Improving Nominal GVA: The old methodology used fixed national rates for inputs like fishing costs (e.g., fixed ratio of 22.5% of output for marine fish since 2004-05 ). MoSPI is updating this to dynamic, State-wise input-output ratios using recent scientific studies (CMFRI/CIFRI) and annual budget analysis. This makes the initial current-price value of the output (GVO) and the calculated GVA much more precise and relevant.
Improving Real GVA: Once the precise Nominal GVA is calculated, it must be adjusted for inflation to get the “real” economic growth figure. The paper proposes moving manufacturing to Double Deflation (adjusting inputs and outputs separately for prices ) and other sectors to Volume Extrapolation. This change ensures the final published growth rate truly reflects volume changes in the economy, not just statistical artifacts from poor inflation adjustment..
Unincorporated Sector (Household Sector):
The indicator-based extrapolation approach previously used (ELI Method) is being replaced. GVA estimates will now be compiled annually using industry-wise productivity data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) and workforce estimates from the Periodic Labour Force Survey (PLFS).
The comprehensive integration of granular data from multiple administrative (MCA-21) and annual surveys (ASUSE, PLFS) institutionalizes a more robust, dynamic, and realistic accounting of economic activity. This will provide policymakers (NITI Aayog, Ministry of Finance) with higher-frequency, structurally refined, and geographically allocable estimates of GVA for the NFPC, General Government, and Unincorporated sectors, drastically improving the foundation for fiscal, monetary, and industrial policy formulation.
What is Gross Value Added (GVA)? → Gross Value Added (GVA) is a crucial measure in national accounts that represents the value of goods and services produced in an area, industry, or sector of an economy, minus the cost of all raw materials, supplies, and other intermediate expenses consumed in the process. It is essentially the measure of a sector’s contribution to the Gross Domestic Product (GDP). GDP is calculated by taking the total GVA across all sectors and adding the total taxes on products (like excise duty or VAT) while subtracting the total subsidies on products. Therefore, GVA focuses purely on the productivity and efficiency of producers by measuring the value added at each step of production.
What is Double Deflation in National Accounts?→ Double Deflation is a method used to calculate constant price (real) estimates of Gross Value Added (GVA) by separately revaluing both the Output and the Intermediate Consumption (Input) components using distinct, appropriate price indices (deflators). This approach provides a more accurate measure of volume change compared to single deflation, which only deflates GVA using a single, output-side price index.
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