New GDP Series Aims to Better Measure India's Economy, Capturing Informal Sector
New GDP Series Aims to Better Measure India's Economy, Capturing Informal Sector
India updates its GDP framework with base year 2022-23 to better capture informal activity, add service-sector insights, and implement a five-year data revision cycle.
Ahead of the release of the revised GDP series with base year 2022-23 on February 27, the government explains that the update is designed to better capture the informal sector and bring more accuracy to household measurements. The plan includes revising the base year every five years and completing the cycle with the updated Index of Industrial Production (IIP) revisions expected by the end of May. The ministry is also launching an annual survey of service sector enterprises to gather more granular data on services activity.
One notable change is how the household sector will be measured. Previously, estimates relied heavily on proxy indicators and extrapolations from a single base year. The new approach aims to provide a more robust picture by incorporating direct inputs and broader service-sector data, which IMF observers have long urged for greater measurement precision.
Officials say the multiple revisions will deliver a clearer picture of the economy, especially the informal segment that forms a large part of employment and output in the country. The exercise is expected to improve policy decisions, support more accurate short- and medium-term forecasts, and align India’s data framework with international best practices. Investors, analysts, and policymakers will be watching how these changes translate into perceived economic health as the updated figures roll out over the coming months.
