MoSPI Proposes Methodological Overhaul for GDP Compilation: Shifting to 2022-23 Base Year
SDG 8: Decent Work and Economic Growth | SDG 17: Partnerships for the Goals
Ministry of Statistics and Programme Implementation (MoSPI) | National Statistics Office (NSO)
The Ministry of Statistics and Programme Implementation (MoSPI) has released its second discussion paper detailing methodological improvements for compiling India’s Gross Domestic Product (GDP) using the expenditure approach. Following the recommendations of the Advisory Committee on National Account Statistics (ACNAS), chaired by Prof. B.N. Goldar, the base year for national accounts is being revised from 2011-12 to 2022-23, with estimates for the new series scheduled for release on 27 February 2026 as per the Advance Release Calendar (ARC).
The first discussion paper was released on changes in compilation of aggregates using the Production/Income Approach in both nominal and real terms.
Key Methodological Revisions:
Adoption of COICOP 2018: The new series will adopt the latest Classification of Individual Consumption according to Purpose (COICOP) 2018, replacing the 1999 version. This involves reclassifying items like tailoring into “Clothing and Footwear” and renaming divisions like “Communication” to “Information and Communication“ to better reflect modern consumption patterns.
Enhanced Data Utilization: The revision proposes a move away from the traditional “commodity flow approach” toward direct estimates using a multi-pronged data strategy. Key new datasets include the Household Consumption Expenditure Survey (HCES), E-Vahan (for personal vehicles), and the Annual Survey of Unincorporated Sector Enterprises (ASUSE).
Institutional Reclassification (FCI): The Food Corporation of India (FCI) will now be classified under the Government Sector instead of the Corporate Sector. Consequently, government financing to FCI will be treated as a social transfer in kind within Government Final Consumption Expenditure (GFCE), rather than a product subsidy.
Asset Life Revision: The average useful life of several assets has been revised to reflect technological changes. For instance, the life of roads and bridges has been reduced from a range of 60–100 years to 60–75 years, while computer software has been reduced from 7 years to 5 years.
Discrepancy Management: The new series plans to integrate the Supply and Use Table (SUT) framework with annual accounts to systematically eliminate statistical discrepancies as full datasets become available.
What is the Advance Release Calendar (ARC)? It is the fixed schedule for releasing GDP estimates. India currently has five annual vintages, ranging from the First Advance Estimates on January 7th to the Final Estimates released two years later in February.
Policy Relevance
The transition to a 2022-23 base year is critical for ensuring that India’s macro-economic statistics accurately reflect the post-pandemic structure of the economy.
Enhanced Global Credibility: By aligning with latest international standards like SNA 2008 (and moving toward SNA 2025), India aims to address data quality concerns raised by international bodies like the IMF.
Evidence-Based Planning: Utilizing dynamic rates and ratios from high-frequency datasets like ASUSE and PLFS will allow for more responsive and accurate fiscal and monetary policy planning.
Transparency in Social Transfers: Reclassifying FCI and treating its funding as a social transfer rather than a subsidy provides a clearer picture of the government’s direct support to households for food security.
Follow the full news here: Methodological Improvements in compilation of GDP from Expenditure Approach