GDP growth
The Indian government keeps taking many steps to increase the economic growth of the country. Be it the decision to increase consumption by cutting GSAT rates or the decision to improve GDP. There is going to be a big change in the new Gross Domestic Product (GDP) series in the country. This will include a new method of pricing houses given by the government, adding Limited Liability Partnership (LLP) companies and new deflators for sectors like mining, financial services as well as real estate.
The Statistics Ministry said on Friday that to estimate the non-financial private corporate sector i.e. private companies, now the entire functioning of multi-activity companies will not be linked to any one business. Instead, information about how much revenue was generated from each activity in company filings will be used to apportion output and value added to each segment.
This is how the growth of unregistered sector will be measured
The new series will directly calculate GVA every year to measure the unregistered or unincorporated sector. For this, production data will be taken from the Annual Survey of Small Businesses (ASUSE) and estimates of the number of workers will be taken from the Periodic Labor Force Survey (PLFS). This will replace the old method, which relied on 10-year-old data and their estimated expansion. The base year of the new GDP series will be 2022-23 and it will be released on 27 February 2026. It will replace the existing 2011-12 base year. The new series will use more detailed and fresh data, which will be obtained from government records and annual surveys.
Financial sector services
Changes will also be made in the financial sector. This will include using official data on the banking system, data from the Ministry of Corporate Affairs for private NBFCs, and improved estimates from ASUSE and All India Debt and Investment Survey 2019 data for moneylenders and insurance agents. There will also be changes in the accounting related to pension in the government sector. Now the pension liability will be calculated in such a way that the change from the old pension scheme to the National Pension System can be properly reflected. This method will replace the old method of considering annual expenditure as existing entitlement.
These updates will also be included
The Statistics Ministry is also including autonomous institutions and local bodies in the scope of GDP in more detail. Other changes include a new ratio of inputs and outputs for marine and freshwater fish farming, new estimates of animal feed production and updated repair and maintenance costs of houses based on AIDIS 2019. This is the first of two proposed discussion documents, which focus on changes in the pattern of production as well as income. The next document will explain the changes in the expense accounting portion. MoSPI has sought suggestions from experts, government organizations and financial institutions on these proposed methods till December 10.