New Delhi: Now a more accurate and transparent picture of the country’s Gross Domestic Product (GDP) will emerge than ever before. The Government of India is going to make a major and revolutionary change in the traditional methods of its assessment. Under this, it will now be closely monitored as to how much the citizens of the country are actually spending on food, clothing, housing, house rental, transportation, entertainment, education and health services. This new system will clearly reveal not only the total consumption but also the changing spending patterns of the countrymen. This will make it easier for the government to understand which goods and services are increasing in demand in the market and in which areas the consumption trends of the general public are changing.
Scope of GDP estimation increased from 46 to 128 items, new draft released
The Ministry of Statistics and Program Implementation has significantly expanded the scope of estimation of ‘Private Final Consumption Expenditure’ (PFCE) in the new series with the year 2022-23 as the base year for scientific estimation of GDP. Whereas in the old system, estimates were prepared on the basis of only 46 items, now under the new system, estimates will be prepared by collecting data of about 128 detailed items. Its official draft has been released.
According to the new draft, private final consumption expenditure will include data ranging from purchase and maintenance of private vehicles to expenditure on road, rail and air travel. To accurately estimate expenditure on road transport and domestic vehicles Uttar Pradesh, Maharashtra Including six major states of the country and Delhi-NCR A special study was conducted in which accurate information about vehicle earnings, fuel consumption, repair and maintenance expenses was collected.
Important changes made in the classification of food items and services
Under the new system of GDP estimation, the classification of several categories has been changed:
dairy products and fats: Butter and ghee will now be placed in the ‘Oils and Fats’ group instead of dairy products.
sweets and desserts: Ice cream has now been moved to the ‘Sugar, Confectionery and Dessert’ group.
clothing and services: Sewing of clothes has now been linked to the cost of cleaning and repairing clothes.
Communication and Financial Services: The ‘Communication’ category has now been renamed as ‘Information and Communication’, while a separate dedicated group has been created for Insurance and Financial Services.
It will be very easy to understand the difference between inflation and actual consumption.
The use of better and improved price indices will enable accurate estimation of changes in real consumption by easily separating the effects of expenditure and inflation at current market prices.
In addition, ‘Household Consumption Survey’ and updated population estimates will be used to prepare state-wise personal consumption expenditure data. To accurately ascertain the regional expansion of banking and insurance services, state-wise authentic data of Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority (IRDAI) will also be taken.
UPI will become the main official scale to measure economic progress.
Unified Payments Interface (UPI) has become synonymous with digital revolution across the country.UPI) will no longer be just a means of digital payment, but is going to become the biggest and official measure to measure the pulse of the overall economy of the country. The Ministry of Statistics and Program Implementation has made a historic proposal to increase the scope and accuracy of the country’s service sector performance.
According to the ministry’s plan, UPI’s digital transaction data and government salary records will now be directly used to track the economic activities of private schools, colleges, universities, private hospitals, health services and various government departments. This entire exercise is part of the expansion of the government’s new ‘Index of Service Production – ISP’. In India, till now only the monthly IIP index was available to measure industrial production, but there was no composite monthly index for the services sector. After including UPI and salary data in this new index, its coverage will increase from 60% to approximately 78% of services GVA.
