The country's economy will receive a boost! New mining and financial services will be incorporated into the GDP system
The new GDP series will have major changes, including new estimates of government housing prices, inclusion of LLP companies, new sector-wise deflators, updated data for small businesses and the financial sector, and new methods of pension calculation.
The Indian government continues to take numerous steps to boost the country's economic growth. Whether it's cutting GST rates to boost consumption or now deciding to improve GDP growth, the country is undergoing a major overhaul of its new Gross Domestic Product (GDP) series.
This will include a new method for pricing homes mandated by the government, the addition of limited liability partnership (LLP) companies, and new deflators for sectors such as mining, financial services, and real estate.
The Statistics Ministry said on Friday that multi-activity companies will no longer be grouped into a single business for estimating the non-financial private corporate sector.
Instead, information on revenue generated from each activity in company filings will be used to distribute output and value added across each segment.
This is how the growth of the unregistered sector will be measured
To measure the unregistered or unincorporated sector, the new series will derive GVA directly each year. It will use production data from the Annual Survey of Small Businesses (ASUSE) and estimates of the number of workers from the Periodic Labour Force Survey (PLFS).
This will replace the previous method, which relied on 10-year-old data and its estimated expansion. The new GDP series will have a base year of 2022-23 and will be released on February 27, 2026, replacing the current base year of 2011-12. The new series will use more detailed and recent data from government records and annual surveys.
Financial sector services
Changes will also be made in the financial sector. This will include the use of official data for the banking system, data from the Ministry of Corporate Affairs for private NBFCs, and improved estimates from ASUSE and the All India Debt and Investment Survey 2019 for moneylenders and insurance agents.
Pension calculations in the government sector will also undergo changes. Pension liabilities will now be calculated in a way that more accurately reflects the transition from the old pension scheme to the National Pension System. This method will replace the old method that considered annual expenditure as current entitlement.
These updates will also be included
The Ministry of Statistics is also expanding the scope of GDP to include autonomous institutions and local bodies in greater detail.
Other changes include a new input-output ratio for marine and freshwater fisheries, a new estimate of animal feed production, and an update to the cost of repair and maintenance of houses based on AIDIS 2019.
This is the first of two proposed discussion documents, which focus on changes in the method of accounting for production as well as income.
The next document will outline changes to the expenditure component. MoSPI has sought suggestions on these proposed methods from experts, government bodies, and financial institutions by December 10.