Let us first understand the new methodology on GDP numbers, changed to reflect the new base year of 2011-12 against the earlier one of 2004-05.
- The revised methodology, changed the way GDP numbers have been calculated. The new method was used to calculate the figures for 2014-15.
- The new numbers changed GDP growth to 5.1 per cent from the earlier 4.5 per cent for 2012-13 and For 2014-15, the growth came at 7.3 per cent.
- Now, GDP is taken at market prices. This includes indirect taxes and excludes subsidies, quite different from what had been calculated so far. Which was GDP at factor cost, which included subsidies and excluded indirect taxes.
- The Central Statistics Office uses price deflators to convert nominal GDP into real GDP, which is a mix of WPI, CPI and other price indices.
Let’s dig out more on –
- Why this new methodology comes into picture this year?
- What is difference between Nominal GDP and Real GDP?