Govt to change base year for computing GDP, revise format

The government is working on changing the way of computing the country's gross domestic product (GDP) by including products from the under-represented and informal sectors of the economy while also revising the base year for GDP calculation to 2011-12 from 2004-05 at present.

The inclusion of new sectors in GDP calculation is expected to show the economy to be larger than previously thought, official sources said.

The government usually revises the method of calculating national accounts and other macro data every five years, in order to adjust for changes in the economy, especially the manufacturing sector.

This is so because the performance of the economy in real terms through the macroeconomic aggregates like GDP, national income, consumption expenditure and capital formation, estimates are prepared at the prices of selected year, known as the base year.

A change in the base year will depict a true picture of the economy through macro aggregates.

The ministry of statistics had, in 2006, changed the base year for calculating the GDP to 2004-05 from 1993-94.

"We plan to release GDP data based on the 2011-12 base year by early next year, that could theoretically revise the growth estimates," a government official said, adding that the methodology for computing the GDP will remain the same.

The government, which is committed to raising economic growth and slashing the fiscal deficit, plans to revise the measurement early in 2015.

The first official estimates of national income were prepared by the Central Statistical Organisation (CSO) with base year 1948-49 for the estimates at constant prices.