2 weeks Ago By Pallavi Nahata
In a bid to address one of the shortfalls behind India's gross domestic product growth estimates, the government is attempting to reduce discrepancies between the production and expenditure side approach, according to a person with direct knowledge of the matter.GDP growth in the October-December 2024 quarter bounced back to 6.2% year-on-year, after falling to 5.
6% in the July-September 2024 quarter. However, discrepancies subtracted 2.8% from growth in October-December 2024, while subtracting 1.
6% from growth in July-September 2024, according to a previous research note by Kaushik Das, chief economist at Deutsche Bank. "GDP growth excluding discrepancies was at 9% year-on-year in the quarter, compared to 7.2% in the previous quarter.
" The differences between the quarterly GDP estimated by economic activity as quarterly GVA at basic prices plus net taxes on products, and the quarterly expenditures of GDP compiled through expenditure approach is shown as discrepancy. As the statistics ministry is in the process of rebasing GDP to fiscal 2023, it is also attempting to reduce discrepancies, according to the person cited above. Discrepancy is caused mainly due to changes in consumption not being captured as regularly as in production side data sources, and use of different data sources in both these approaches, the person explained.
India's GDP Growth Seen At 6.7% In 2025: Asian Development BankDouble DeflationThe statistics ministry currently uses double deflation for agriculture sector. In the base revision, double deflation will likely be expanded to mining, manufacturing, rail transport and electricity, according to the person.
Notably, double deflation is a method deployed in economics to determine the real value added by deflating both intermediate consumption and output at constant prices.Here are other key measures likely to be enacted, as part of the base year revision for GDP.Annual survey of unincorporated sector enterprises for unorganised sector estimates.
Use of GST data.Use of the annual survey of service sector enterprises and GVA to state.Household consumption expenditure survey results for the base revision.
De-seasonalised quarterly estimates of GDP.Wider consultation with state directorates of economics.The ministry is targeting to publish the new GDP series in February 2026.
It also plans to publish a capex survey for the first time at the end of this month. Starting next month, it also plans to publish unemployment surveys for the months of January, February and March, the person added.Base year revisions for both wholesale price index and consumer price index are also underway, along with efforts to compile a producer price index.
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