- Why in news
- On 9 October 2026, MoSPI's National Statistics Office released a draft guideline for compiling Gross State Domestic Product (GSDP) from the expenditure side, with base year 2022-23. Feedback is invited by 28 October 2026.
- What it is
- GSDP is the total value of goods and services produced within a State in a year. It is usually estimated from the production (output) side and the income side. The expenditure approach adds up spending on final goods and services: consumption, investment and net exports. The guideline sets a common method for States and UTs.
- Who issued it
- The National Statistics Office under MoSPI prepared the draft guideline.
- Expenditure components
- Covers PFCE, GFCE, GFCF, changes in inventories, valuables and net exports.
- Current State practice
- Some States/UTs compile GFCF and GFCE, but none compiles PFCE.
- Missing data
- Where direct State-level data are lacking, allocation methods and indicators are recommended.
- Expenditure identity
- GDP by expenditure = C + I + G + (X - M).
- Release and update dates
- MoSPI released the series on 27 February 2026 and updated it on 31 August 2026 to reflect new PPI and IIP series.
- Advisory Committee (ACNAS)
- MoSPI set up ACNAS under Prof. B.N. Goldar on 27 June 2024. It formed four sub-committees, one of them on Regional Accounts chaired by Prof. R.H. Dholakia.
- Consumption classification
- Private Final Consumption Expenditure (PFCE) now uses the UN's COICOP 2018 classification.
- Quarterly GDP method
- Quarterly accounts replace the old benchmarking method with the Proportional Denton approach and use more GST and administrative data.
- Household sector data
- Household sector estimates now come directly from two MoSPI surveys, ASUSE and PLFS.
Don’t confuse with GDP vs GVA: GVA is output minus intermediate consumption; GDP equals GVA plus taxes minus subsidies on products.
Don’t confuse with PFCE vs GFCE: PFCE is household (and NPISH) spending; GFCE is government spending on collective and individual services.
Don’t confuse with Production vs expenditure approach: The production approach sums value added by sectors (GVA). The expenditure approach sums final spending: consumption, investment and net exports.
Don’t confuse with GVA vs GDP: GVA is output minus intermediate consumption. GDP is GVA plus taxes on products minus subsidies on products.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- Gives States a common method, so GSDP is comparable across States.
- Aligns State accounts with national-level methodology and shows demand drivers of State economies.
- A newer base year captures current consumption patterns, new data sources and the structure of the economy more accurately.
- A published methodology adds transparency and lets users, researchers and policymakers check and compare the estimates.
Problems
- No State compiles PFCE now, and direct State-level data are scarce.
- Allocation indicators may give weak estimates; State statistical capacity varies.
- Revised base years change growth rates and make comparison with the old series difficult.
- Informal-sector measurement is hard and depends on survey quality and administrative data coverage.
Way forward
- Use feedback by 28 October 2026 to finalise the guideline.
- Train State DESs and improve State-level household survey data.
- Publish back series and reconciliations so that old and new data can be compared.
- Keep improving administrative and survey data sources, and consult data users regularly.
Put in your answer
Statistical capacity: The guideline aims to strengthen State Directorates of Economics and Statistics.
Consultation process: ACNAS held nine rounds of meetings, and three Data User Conferences were held in Mumbai, New Delhi and Chennai. MoSPI also consulted the IMF.
Use of administrative data: The new series uses corporate filings, LLP records and GST data to improve industry classification and quarterly estimates.
- 2021Mains GS3 · Q1Explains how India's GDP computation methodology changed after 2015
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- 2001Prelims Q89Matches publishers with publications, including which body publishes National Accounts Statistics
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Single answer
Ours, not from a UPSC paper
Consider the following statements about the draft guideline for compiling Gross State Domestic Product (GSDP) from the expenditure side:
Which one of the following statements is correct?
True or false?
1 of 5
Statements the way Prelims prints them. Say first, then see the fact.
1.The draft guideline was prepared by the National Statistics Office under the Ministry of Statistics and Programme Implementation.
True. NSO, MoSPI prepared it.
2.At present, no State or UT compiles estimates of Private Final Consumption Expenditure.
True. PFCE is not compiled by any State/UT.
3.At present, no State or UT compiles estimates of Gross Fixed Capital Formation.
False. Some States/UTs already compile GFCF and GFCE; none compiles PFCE.
4.Net exports in the expenditure approach are exports minus imports.
True. Net exports = exports - imports.
5.The expenditure-side estimate is meant as a complement to the production/income-side GSDP estimate.
True. It is a complementary approach.
Written by us from the release, not by UPSC; checked by a second model.
Worth revising until Prelims 2028: most news questions come within two years of the event.