Govt to track e-commerce platforms for inflation calculation from next year, GDP to factor in GST data

The new GDP and IIP series with base of year of 2022-23, and CPI inflation series with 2024 as the base year, are likely to see significant improvements in data collection over the current methodology. New inflation series is likely to track prices of items on e-commerce platforms for the purpose of ascertaining inflation data.

GDP calculation will make use of the GST data, data from the unincorporated sector while inflation data collection will be a more advanced tech-based granular data collection factoring in price movements at additional cities and tracking additional items.

These aspects were discussed today at the first pre-release consultative workshop on the base revision of GDP, CPI and IIP organized by ministry of statistics and programme implementation (MoSPI) in Mumbai today. According to a government statement, the workshop aimed at briefing key stakeholders on the proposed revisions ahead of the release of the new series next year.

“In the proposed changes in CPI, MoSPI highlighted the enhancement in coverage in terms of markets, towns and items, adoption of Classification of Individual Consumption by Purpose (COICOP) 2018, refinement in methodology of index compilation, inclusion of new data sources including administrative and online data, use of latest technology and more granular data dissemination,” said a statement from the ministry of statistics.

Adoption of Classification of Individual Consumption by Purpose (COICOP) 2018 – an international framework for classifying household consumption – for purpose inflation calculation in the new series is a very significant step as it will facilitate global comparison of consumption, living standards and price movements. COICOP was issued by the Department of Economic and Social Affairs of the United Nations in 2018.

For GDP calculation, GST data will be explored for corroborating frame of private corporations and regional allocation of GVA across industries, the ministry said. “GVA estimates of the unincorporated sector will be compiled using industry-wise productivity information from Annual Survey of Unincorporated Sector Enterprises (ASUSE) and corresponding workforce estimates from Periodic Labour Force Survey (PLFS),” the release said.  

“In view of availability of annual results from these surveys, estimates will be generated annually for unincorporated sector in the new series, as opposed to the indicator-based extrapolation approach followed in the existing series,” the release added.

“The major changes and improvements in the base-year revision of the Index of Industrial Production (IIP) focus on expanding coverage, enhancing data quality, and better aligning the index with the evolving industrial landscape through extensive review of the existing item basket, reporting units, replacing non-operational factories with active units and improved identification and treatment of not elsewhere classified items,” it added.