Towards measuring the economy more accurately

Measuring the Indian economy is a complex task. Regional disparities, the coexistence of formal and informal sectors, and vastly different forms and

kinds of work make it difficult to capture all economic activity accurately. A further challenge lies in updating information regularly and ensuring that data allow for comparisons across time – something that has often been difficult in India given the low frequency of key surveys.

Reliable and consistent measures at both the national and subnational levels are, however, essential to understanding not just how much the economy is growing and changing, but where and for whom that growth occurs. In this regard, many new initiatives of the Ministry of Statistics and Programme Implementation (MoSPI) are very encouraging. Most of these are aimed at ensuring the regular provision of high-frequency, spatially disaggregated information on key economic variables like employment, output, income, consumption and investment.

Measuring the unmeasured

The launch of the Annual Survey of Unincorporated Sector Enterprises (ASUSE) in FY 2021-22 was an important step towards the annual measurement of economic activity within the unorganised sector in manufacturing, trade and other services (excluding construction). Prior to ASUSE, surveys related to the informal sector used to happen once every few years. During the intervening period, statisticians had to rely on projections for the purpose of analysis.

Another major gap in the current system pertains to the annual measurement of the formal service sector. The Ministry has announced that it will launch the Annual Survey of Incorporated Services Sector Enterprises (ASISSE), which will capture this component of the economy. This will be yet another valuable addition, because unlike the Annual Survey of Industries (ASI) which provides annual data related to the

formal secondary sector, there is no such annual survey for the service sector. Taken together, the ASUSE, ASI and ASSISE can provide the statistical backbone to generate reliable data pertaining to economic activity across sectors and regions.

High-frequency indicators

In 2017, India started the Periodic Labour Force Survey (PLFS), with the objective of providing annual estimates related to the country’s labour force. Prior to the launch of this survey, employment-related data used to be available once every five years by means of the NSS’s quinquennial Employment-Unemployment Surveys. The PLFS was a major shift towards the provision of annual estimates. In January 2025, MoSPI went a step ahead and announced that national-level PLFS estimates will now be made available on a monthly basis, and that quarterly estimates will now be available for both urban and rural areas (as opposed to only urban areas earlier).

In addition, the sampling strategy has been adjusted in a way to make the PLFS sample “more representative for district-level analysis”. Going forward, high-frequency and geographically detailed employment data will make it easier to map productivity and income gen-eration across districts. Similarly, the Household Consumption Expenditure Survey (HCES) has replaced the old series of consumption surveys, and as per sources, will be conducted more frequently.

New base year for GDP series

All ‘real’ GDP estimates are associated with a base year. Currently, the Indian statistical system follows FY (Financial Year) 2011-12 for this and a base year revision is, therefore, long overdue. MoSPI is currently in the process of revising the base year. During this process, the ministry aims to introduce several potential methodological improvements in GDP estimation. For instance, going forward, new sources of information such as the GST database and data from some of the newer surveys will be used to estimate GDP.

Similarly, for multi-sector firms, their total output will be segregated across all the sectors that they operate in. The basket of goods used to calculate inflation will also be updated on the basis of data collected during the latest rounds of HCES. The new series is expected to be launched by next year. This will have implications for our understanding of inflation, and inflation adjusted output at both national and subnational levels.

National to sub-national

In addition to improving the economy’s measurement at the national level, these measures will greatly enhance the precision of estimation at the sub-national levels (State and district). In October 2025, speaking at a public event, the Ministry’s Secretary conveyed that they are working with State governments to come up with estimates of District Domestic Product (DDP), i.e., the district-level counterpart of GDP, using the more recent streamlined versions of the ASUSE and PLFS.

The use of the ASUSE and PLFS in this context will help capture both enterprise activity and employment structures across districts, giving policymakers a more detailed view of local eco-nomies. A reliable DDP framework will, in turn, allow comparisons across States and districts and help identify the true sources of economic growth and structural transformation.

More reforms in the pipeline

The Ministry of Statistics and Programme Implementation (MoSPI) has also conveyed its intention of launching a new annual survey – the National Household Income Survey (NHIS).

If successful, the NHIS will allow for more precise estimation of household income, along with a comparison of income levels across regions and different demographic groups.

Thus far, India has relied on the NSS consumption survey to get a sense of household income through its observed spending, but this survey will provide a more direct measure of a key indicator of economic outcomes.

The ministry deserves credit for what seems to be a significant revamp of statistical systems related to the measurement of the economy. However, the success of these reforms will depend crucially on transparency and data accessibility. Public release of datasets, clear meth- odological documentation, and open consultations with researchers will ensure that the statistics produced are trusted and widely used.

The frequent Data User’s Conferences organised by MoSPI have provided a transparent platform for government statisticians and academicians to discuss the ministry’s initiatives. Such fora are vital to build credibility and ensure that the expanded data infrastructure remains accountable to its users.

In the past, concerns had been raised when MoSPI scrapped or delayed key surveys, such as the 2017-18 Consumption Expenditure Survey, which undermined confidence in the system. Avoiding such reversals will be essential if the Ministry’s new agenda is to take root.

Being the birthplace of PC Mahalanobis, India has the capacity to implement and maintain a high-quality statistical system. Recent steps seem to be in the correct direction. One can only hope that the ministry’s ambitious agenda is sustained in the long run.