New GDP Series

New GDP Series

  • Context:

  • India has introduced a new GDP series, revising the base year from 2011-12 to 2022-23.

  • The Ministry of Statistics and Programme Implementation (MoSPI) has released data showing that this series provides a more stable and accurate representation of the economy.

  • Key Changes and Macroeconomic Adjustments:

  • The new series reflects more stable real growth rates (7.1-7.6%) for the three years starting 2023-24, compared to the more volatile previous estimates (6.5-9.2%).

  • There has been a 3-4% reduction in the overall size of the economy in nominal terms (without adjusting for price changes).

  • Notably, the new GDP series will not use UPI transaction data, as it was deemed unstable and too broad.

  • Sectoral Shifts:

  • griculture's Upward Revision:

  • The 'Agriculture, livestock, forestry and fishing' sector is estimated to be, on average, 5% larger in current prices over the four years starting 2022-23.

  • Its share in the economy increased to 18.2% in 2022-23 (up from 16.5% under the old series), though it still shows a long-term shrinking trend, accounting for 16.2% of GDP in 2025-26.

  • The farm sector is larger than previously thought due to two primary reasons:

  • Shift to High-Value Cash Crops

  • Reduction in Power Input Costs

  • Capturing the Unorganised Sector:

  • A major criticism of past GDP data was the inaccurate measurement of the informal sector.

  • The new series addresses this by integrating data from the Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE), thereby reducing reliance on formal sector proxies.

  • Manufacturing vs. Services:

  • This improved measurement has led to consistently stronger growth estimates for the manufacturing sector.

  • Conversely, informal-heavy service sectors (like Trade, repair, Hotels & Restaurants, Transport) saw their Gross Value Added (GVA) fall by almost 25% on average annually from 2022-23 to 2025-26, suggesting the size of the unorganised sector in these areas was previously overestimated.

  • Comment:

  • Unlike the controversial 2015 rebasing exercise, this update has been widely welcomed by economists.

  • Initial assessments from institutions like the State Bank of India and Barclays described the new series as "comprehensive" and "realistic and reliable," respectively.