Why in the News
The Ministry of Statistics and Programme Implementation has decided not to use Unified Payments Interface transaction data in India’s new GDP series with base year 2022 to 23, citing instability and classification limitations.
Why Was UPI Data Considered?
- UPI transaction data from the National Payments Corporation of India provides:
- Value of transactions in rupees
- Volume of transactions
- Merchant category codes
- It was proposed as a non traditional indicator to estimate Private Final Consumption Expenditure (PFCE), a key component of GDP from the expenditure side.
Why Was It Rejected?
- Overlapping Merchant Categories: Merchant codes such as 5411 for supermarkets cover multiple product types, making it difficult to classify transactions under specific PFCE consumption heads.
- Non Consumption Transactions Included: Certain categories like debt collection agencies do not represent household consumption but account for notable transaction value.
- Unstable and Incomplete Data Coverage: Continued reliance on cash and ongoing digital transition mean UPI trends do not yet fully capture overall consumption patterns. The Advisory Committee suggested reconsideration once data stabilises.
About GDP Estimation in India
- India calculates GDP using:
- Production or Income Approach
- Expenditure Approach
- PFCE forms more than half of India’s GDP.
- Under the new series:
- Base year updated from 2011 to 12 to 2022 to 23
- PFCE items expanded from 46 to 128
- Published data will cover 49 items across 13 categories
Alternative Data Sources Being Used
- Goods and Services Tax data
- Vahan vehicle registration data
- Sector specific indicators
| [2013] The national income of a country for a given period is equal to the (a) total value of goods and services produced by the nationals
(b) sum of total consumption and investment expenditure (c) sum of personal income of all individuals (d) money value of final goods and services produced |
