FIMPACT Newsletter No. 70 (dated 2nd February 2015). Contact us at contact.investments@ifmr.co.

in

In the previous newsletter dated January 26, 2015, we provided an update on the status of priority sector lending
in India. In this newsletter, we give an overview of the new series and methodology for GDP computation in India.
The Ministry of Statistics and Programme Implementation (MOSPI), Government of India, released the new
series estimate for Indias GDP on January 30, 2015, based on the revision of the base year from 2004-05 to
2011-12. The base year of national accounts was last revised in January 2010.
Apart from shifting the base year, conceptual changes, in line with international guidelines have also been
incorporated in the latest revision. Further, inclusion of new data sources have also been made in the
methodology for GDP computation. Changes have also been made in the presentation of estimates to improve
understanding and facilitate better international comparability.
Significant changes
Going forward, MOSPI will no longer be releasing the series for Gross Domestic Product (GDP) at factor cost.
Only the series for GDP at market prices will be released which will now be referred to as GDP. To enable the
users to construct the series for GDP at factor cost at their end, MOSPI will be releasing data for indirect
transfers (like taxes and subsidies).
The other significance change is the comprehensive coverage of corporate sector both in manufacturing and
services by incorporation of annual accounts of companies in India as filed with the Ministry of Corporate Affairs
(MCA) under their e-governance initiative, MCA21. Partnership firms covered under Limited Liability Partnership
Act have also been covered. For the manufacturing enterprises, MCA21 database has been used to supplement
the information available in the Annual Survey of Industries.
The revision also incorporates improved coverage of local bodies and autonomous institutions, resulting in better
coverage of government activities. Also data from Indias National Sample Surveys (NSS) has also been
included.
Apart from the above, changes have been made to sectoral indices like agriculture, utilities and financials to
incorporate better and expanded data.
Effect of change
At a broad level, the GDP numbers under the old and revised series are as follows,

FIMPACT Newsletter No. 70 (dated 2nd February 2015). Contact us at contact.investments@ifmr.co.in

Old vs New GDP Data

Old GDP series
10.3

12.0
9.5 9.3

Year on Year (%)

10.0
8.0

9.6 9.3

9.3

9.8

8.6 8.5

7.9
7.0

8.9

6.7

6.9

6.7 6.6

6.0

4.5

3.7

4.0

New GDP series

5.1

4.7

2.0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Source: MOSPI. Data is for real GDP at Market Prices

For the year 2012-13 and 2013-14, the GDP data have seen significant upward revision indicating that the Indian
economy grew at a higher rate than what was estimated. Given that the manufacturing data has been
significantly revised to incorporate MCA21 changes, the manufacturing and mining indices shows a higher
growth in the new series as compared to the old series.
Growth Rate for Major Sectors Under Old and New Series for the Year 2013-14
6.0

5.4

5.0
Year on Year (%)

5.3

Old series

New series

4.7
3.7

4.0

2.5

3.0
1.6

2.0
1.0
0.0
-1.0

-0.7

-2.0
Agriculture, forestry and
fishing

-1.4
Mining and quarrying

Manufacturing

Construction

Source: MOSPI

The current shifting of the base year for National Accounts in India has been accompanied by changes in the
data collection process, inclusion of new data and tweaking of computation methodology on par with
international best practices. This is expected to make the Indian system of National Accounts more robust and
provide better estimates for economic activity.

FIMPACT Newsletter No. 70 (dated 2nd February 2015). Contact us at contact.investments@ifmr.co.in

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