{"id":126515,"date":"2026-09-28T11:28:01","date_gmt":"2026-09-28T05:58:01","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=126515"},"modified":"2026-09-28T11:28:01","modified_gmt":"2026-09-28T05:58:01","slug":"indias-new-gdp-series-five-additional-methodological-changes","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-new-gdp-series-five-additional-methodological-changes\/","title":{"rendered":"India\u2019s New GDP Series &#8211; Five Additional Methodological Changes"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><b>New GDP Series Latest News<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Ministry of Statistics and Programme Implementation (<\/span><b>MoSPI<\/b><span style=\"font-weight: 400;\">) has introduced a new GDP series with <\/span><b>2022-23<\/b><span style=\"font-weight: 400;\"> as the base year, replacing the earlier 2011-12 series.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While changes such as double deflation, improved informal-sector estimates and the use of new price indices have received considerable attention, several other methodological changes have also been introduced.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to MoSPI, <\/span><b>five additional changes<\/b><span style=\"font-weight: 400;\"> aim to improve the accuracy, coverage and reliability of India\u2019s national income estimates.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Improved Classification of Manufacturing and Services<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Earlier methodology (2011-12 series)<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Enterprises engaged in multiple activities were classified according to their major activity.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Their entire Gross Value Added (GVA) was assigned to the sector contributing the largest share of turnover.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>New methodology (2022-23 series)<\/b><span style=\"font-weight: 400;\">: An enterprise\u2019s GVA is distributed between manufacturing and services according to the respective contributions of these activities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Data source<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">MoSPI uses information from the Ministry of Corporate Affairs&#8217; annual MGT-7 and MGT-7A forms, which companies submit to disclose their financial and operational details.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">These forms require companies to report business activities contributing at least 10% of their turnover, along with their respective shares.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">: This activity-based classification provides a more accurate picture of sectoral GVA, particularly for enterprises engaged in both manufacturing and services.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Inclusion of Government-Provided Housing Services<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li aria-level=\"1\"><b>Earlier GDP series:<\/b><\/li>\n<\/ul>\n<ul style=\"text-align: justify;\">\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It did not adequately account for the housing services provided to government employees living in government-owned accommodation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">While House Rent Allowance (HRA) is included in government employees&#8217; salaries, the imputed value of housing services provided to employees was not separately accounted for.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>New methodology<\/b><span style=\"font-weight: 400;\">: The new series estimates the value of these housing services using the cost of constructing the houses, after accounting for repairs, maintenance and annual consumption of fixed capital.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">: This improves the measurement of government-provided housing services and ensures more comprehensive coverage of economic activity.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Revision of the Useful Life of Fixed Assets<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The new GDP series has revised the estimated average useful life of several assets to calculate their annual consumption of fixed capital (depreciation).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>For instance<\/b><span style=\"font-weight: 400;\">, the average useful life of dwellings is now assumed to be 60-75 years, down from 70-80 years in the old series.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">MoSPI periodically reviews the useful life of assets, considering technological changes, obsolescence, operating conditions, maintenance practices and regulatory requirements.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">: Revised asset-life estimates improve the measurement of depreciation and, consequently, the estimation of GVA and other national accounts aggregates.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Improved Estimation of Household Savings<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Household savings, an important component of national accounts, comprise financial assets, physical assets and valuables such as gold and silver. The new GDP series introduces <\/span><b>two major changes<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Financial savings<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Data on shares, debentures, hybrid instruments and<\/span><b> mutual funds<\/b><span style=\"font-weight: 400;\"> are now sourced from the Securities and Exchange Board of India (SEBI), replacing the earlier reliance on the Reserve Bank of India (RBI).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">This enables the inclusion of newer investment instruments, including <strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/reit\/\" target=\"_blank\">Real Estate Investment Trusts (REITs)<\/a><\/strong>, <strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/infrastructure-investment-trust-invit\/\" target=\"_blank\">Infrastructure Investment Trusts (InvITs)<\/a> <\/strong>and Alternative Investment Funds (AIFs).<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Savings in valuables<\/b><span style=\"font-weight: 400;\">: The estimated nominal household savings in<\/span><b> gold and silver<\/b><span style=\"font-weight: 400;\"> ornaments for 2022-23 increased to \u20b91.65 lakh crore, compared to \u20b964,504 crore in the previous series.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The revised methodology improves the coverage of financial instruments and provides a more comprehensive estimate of household savings.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The (above) estimates are based on the 2019 All India Debt and Investment Survey (AIDIS). MoSPI initiated a fresh AIDIS in July 2026, which is scheduled to conclude in June 2027.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Inclusion of Rooftop Solar Electricity<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The new GDP series includes electricity generated by households through rooftop solar panels for their own consumption. The estimation methodology varies across years.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For example,<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>2022-23 and 2023-24<\/b><span style=\"font-weight: 400;\">: Estimates are based on the respective Household Consumption Expenditure Surveys and the Ministry of Health&#8217;s population projections.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>2024-25 onwards<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">Estimates use the growth in installed rooftop solar capacity, as reported by the Ministry of New and Renewable Energy (MNRE), along with the applicable per-unit electricity price.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"3\"><span style=\"font-weight: 400;\">This electricity is included in the electricity, gas, water supply and other utility services sector.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Significance<\/b><span style=\"font-weight: 400;\">: The inclusion of household-generated electricity improves the coverage of economic activity, particularly self-consumed renewable energy that may not be fully reflected in conventional electricity sales data.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><b>Conclusion<\/b><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The five additional changes in the 2022-23 GDP series extend beyond the revision of the base year.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">They improve the classification of economic activities, measurement of government services, estimation of depreciation, coverage of household savings and accounting for decentralised renewable energy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Together, these methodological improvements aim to make India&#8217;s national accounts <\/span><b>more comprehensive and representative<\/b><span style=\"font-weight: 400;\"> of structural changes in the economy.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><b>Source: <\/b><a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/new-gdp-series-key-changes-methodology-10890246\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>IE<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to MoSPI, five additional changes in the new GDP series aim to improve the accuracy, coverage and reliability of India\u2019s national income estimates.<\/p>\n","protected":false},"author":19,"featured_media":126518,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[1912],"class_list":["post-126515","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-new-gdp-series","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=126515"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126515\/revisions"}],"predecessor-version":[{"id":126549,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126515\/revisions\/126549"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/126518"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=126515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=126515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=126515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}