New GDP series adopts double deflation

The Ministry of Statistics and Programme Implementation (MoSPI) has initiated the process of revising the base year of India’s National Accounts to FY 2022–23, aiming to better reflect structural changes in the economy and improve GDP measurement.

As part of this effort, an Advisory Committee on National Account Statistics (ACNAS) has been constituted under the chairmanship of noted economist B.N. Goldar. The panel will recommend updated methodologies and identify new data sources for compiling and presenting National Accounts Statistics under the revised series.

Key Methodological Changes

• Shift to Double Deflation: The new GDP series moves away from a single-deflator approach toward a more conceptually robust method. Under double deflation, both output and intermediate consumption are separately deflated using relevant price indices to calculate value added at constant prices. This is expected to improve the accuracy of Gross Value Added (GVA), especially in the manufacturing sector.
• Use of Volume/Single Extrapolation: In sectors where data constraints make double deflation difficult, MoSPI will adopt volume extrapolation or single extrapolation using reliable indicators.

Objective of Revision

The revision seeks to:

• Reflect evolving economic structures and sectoral dynamics
• Improve the precision of GDP and GVA estimates
• Align India’s statistical framework with international best practices