India’s new GDP series will replace broad-based deflators with sector-specific indices and updated price data to calculate economic output, according to a report by the Sub-Committee for Constant Price Estimates. The transition will incorporate a new CPI (Base: 2024) and Unit Value Indices (Base: 2022-23), alongside an updated WPI (Base: 2022-23) or Producer Price Index where available.
By separately deflating output and intermediate consumption—the revised framework aims to provide a more accurate measurement of the real Gross Value Added (GVA) across the manufacturing and services sectors. The report also notes that the “single extrapolation” method is retained for some compilation categories where data limitations produce excessive volatility.
The new GDP series is set for release on February 27.
Not all sectors will be measured the same way. Where data is rich and economic behaviour predictable, the Sub-Committee has recommended the double deflation method, which separately prices output and inputs to arrive at real value added. But for categories where information on imported materials is thin or unreliable, the panel has opted to retain single extrapolation. Seven of the thirty categories under manufacturing will still use the single extrapolation method. For instance, manufacture of electronic components, consumer electronics, magnetic and optical media; computer and communication equipments; pharmaceuticals; and food and oils processing, etc.
For the others, to calculate real growth for each manufacturing category, the new methodology derives GVA by separately deflating output and intermediate consumption. While the output is deflated using the standard Wholesale Price Index (WPI), a more complex composite deflator was developed for intermediate consumption. This composite index combines item-wise WPI for domestic goods, National Accounts deflators for services, and a custom price index for imported items based on historical unit prices from the Annual Survey of Industries (ASI).
The report also addresses long-standing challenges in measuring the unorganised sector and utilise direct data from the Annual Survey of Unincorporated Sector Enterprises (ASUSE) alongside Periodic Labour Force Survey (PLFS) workforce estimates.
For the financial sector, the Consumer Price Index (CPI-General) has been recommended to deflate outputs across most financial sub-sectors, while the Experimental Banking Services Price Index (BSPI) will be used for deposit taking corporations (except RBI).
There is also a change in how government consumption expenditure is measured in real terms. Compensation of employees will now be deflated using the Consumer Price Index for Industrial Workers (CPI-IW), replacing the broader CPI-General used in the 2011-12 series—a shift that aligns the methodology with how real output is measured for Public Administration and Defence. The deflation of net commodity and service purchases by government will continue using a composite weighted price index, though the underlying weights have been updated to reflect 2022-23 spending patterns rather than decade-old ones.
However, the panel largely retained the price deflators currently used to measure capital formation in real terms. Under the 2011-12 series, different price indices were applied asset by asset: Construction indices for buildings and dwellings, WPI-based weighted indices for transport equipment, ICT, machinery and weapon systems etc. After reviewing both the existing deflators and international practices, the Sub-Committee concluded that the framework is broadly sound and recommended carrying most of it forward into the new series.
First Published: Feb 20, 2026, 21:32
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