GS 3 · 2021Economy10 Marks
Q20.Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015.
Directive: Explain10 marks
Introduction
India revised its Gross Domestic Product (GDP) computation methodology in 2015 to enhance accuracy and align with international standards.
Key Differences in GDP Computation
Pre-2015 Methodology
Before 2015, GDP was calculated with 2004-05 as the base year, primarily using GDP at Factor Cost.
Post-2015 Methodology
Post-2015, the base year shifted to 2011-12. GDP at Market Prices became the main measure, alongside Gross Value Added (GVA) at Basic Prices.
Key Enhancements and Rationale
- Expanded data coverage using the MCA21 database for corporate sector and improved financial corporation data.
- Aligned India's national accounts with the international standard System of National Accounts (SNA) 2008.
- Often resulted in higher reported GDP growth rates due to methodological changes and expanded coverage.
Conclusion
These changes provided a more comprehensive and globally comparable picture of India's economic performance.
125 words · target ~150