New GDP series to rely on nearly 600 item-level deflators; older WPI series unlikely to distort growth: Statistics secretary Saurabh Garg

India's GDP unlikely to be affected by old WPI series

• New GDP series to use 600 item-level deflators for accuracy
• Base year will shift to 2022-23, reducing reliance on old indices
• Supply-Use Table integration aims to minimize GDP discrepancies

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Concerns that the continued use of the older wholesale price index series could distort growth calculations are misplaced, as the new GDP series will rely on more granular, product-level deflators, Statistics Secretary Saurabh Garg said in an interview ahead of the GDP release.

The new series, which will revise the base year to 2022-23, will use nearly 600 item-wise deflators, compared with around 180 in the earlier series, significantly reducing dependence on broader price indices and improving the precision of real growth estimates.

“We are using deflators that are at a very disaggregated or item-wise level. Earlier, we had around 180 deflators. In the new series, the number will be closer to 600,” Garg said.

He added that while the basket composition may change and alter headline numbers, price collection methods at the item level remain consistent. “At the item level, the prices and methodology remain the same. So, we don’t expect much distortion, because the prices are current in any case,” he said.

Garg cited the example of CPI estimates where item-level price data largely remained the same despite a change in base year estimation.

Five-year revision cycle likely

On the frequency of base revisions, Garg said India is expected to align with the international practice of revising GDP bases roughly every five years, subject to unforeseen circumstances.

“For GDP base revisions, the international norm is approximately every five years, which is expected to be followed,” he said.

One of the biggest methodological upgrades in the new series relates to the measurement of the household sector, historically one of the most debated components of India’s GDP.

Fewer discrepancies

To address discrepancies between GDP measured under production and expenditure approaches, the new series will integrate the Supply-Use Table (SUT) framework with national accounts.

SUT balances what industries produce with how goods and services are used in the economy, ensuring total supply matches total demand.

“Integration of SUT with the National Accounts Framework will help minimise discrepancies in the new series,” Garg said.