India’s Ministry of Statistics and Programme Implementation unveils a detailed new framework for national accounts, significantly advancing the precision of GDP measurement through widespread use of double deflation to better reflect real growth and align with international practices.
India’s statistical agency has set out in detail how the country’s new national accounts series is being built, underscoring a sharper move towards international accounting practice and a more granular treatment of manufacturing. The Ministry of Statistics and Programme Implementation said its latest “Sources and Methods” document shows that double deflation was used in 28 of 30 manufacturing categories, with work under way to extend the approach to the remaining two. According to the ministry, the method gives a better estimate of real growth because it separately adjusts output and inputs for inflation.
The two areas still using single extrapolation are meat, fish, fruit, vegetable, oil and fat processing, and pharmaceuticals and medicinal chemicals. In both, the ministry said imported inputs make it difficult to match item-by-item output data with producer price indices. Reuters-style explanations of the new series note that double deflation has long been seen as the more accurate way to measure gross value added, the contribution a sector makes after subtracting the cost of intermediate inputs.
The change matters because India’s earlier GDP series relied on less consistent price adjustments across sectors, a practice that drew criticism from economists. For the old base year, double deflation was used mainly for agriculture and mining, while other sectors often relied on broader price measures such as wholesale and consumer inflation. The ministry says the new framework, built around 2022-23 as the base year, brings India closer to global statistical standards and improves the measurement of real GDP.
The publication of the methods paper also closes a long-standing gap in official disclosure. The ministry said it took seven months to release the full document, which it described as the fastest turnaround yet after a GDP rebasing. The paper gathers together concepts, definitions, data sources and compilation procedures, while also drawing on earlier sub-committee reports on methodological improvements, constant-price estimates and new data sources. Officials quoted by the Indian Express said a set of frequently asked questions may follow if the document prompts further debate.
The broader debate around the new series has not been limited to manufacturing. The Indian Express reported that the rebasing reduced nominal GDP in earlier years and trimmed the household sector’s measured contribution, a change that MoSPI Secretary Saurabh Garg has linked to a better capture of informal activity. The same recalibration also altered views of construction and some services, suggesting a more formal economy in some areas and a more informal one in others. Separate reporting on the new methodology shows why the ministry has been keen to clarify the mechanics of double deflation: when input costs rise faster than output prices, the implied deflator can turn negative without meaning prices themselves are falling.
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