Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015.

Sample Answer


In 2015, the Central Statistical Office (CSO) made changes to computing methodology of GDP based upon recommendations of K Sundaram Committee. This has brought India’s methodology in line with international standards of System of National Accounting 2008.


Important Changes:

  • Change in the base year from 2004-2005 to 2011-2012.
  • Change in Default GDP from the GDP at Factor Cost to GDP at Market Prices.

Change in GDP methodology

  • Sector wise estimates using GVA at Basic Prices i.e., GDP at Factor Cost + Production Taxes – Production Subsidies.
  • Calculation of GDP: GVA at basic prices + Product Taxes – Product subsidies.
  • Change in database from Annual Survey of Industries (ASI) to MCA-21 database of Ministry of Corporate affairs
  • Improved coverage of financial corporations through information provided by SEBI, PFRDA, IRDA etc.
  • Some economists have highlighted that these changes have inflated GDP numbers by around 2.5% on account of – Change in default GDP, Presence of shell firms(38%) in MCA database etc. However, Eco Survey 2018-19 has highlighted that these concerns are unfounded.


The credibility of the economy depends upon ability to come out with fool-proof and indisputable GDP estimates. Hence, recommendations of the Pronab Sen committee should be taken into consideration in the future.

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