GDP more than aggregation of high-frequency indicators: Pronab Sen, India’s first chief statistician

GDP growth is often misunderstood and can be confusing for the public, as the India's first chief statistician, Pronab Sen, explained. The statistics ministry provides initial estimates, which are then revised multiple times as more data becomes available, with the final figures taking two years to be released. This initial estimate, for example, the 7.8% growth for Q1, is not the final number.

The GDP calculation goes beyond just aggregating high-frequency data. It takes into account various other factors, some of which have been significantly improved over time. For instance, the Periodic Labour Force Survey has been a valuable input to GDP estimation for a long time. More recently, the Annual Survey of Unincorporated Sector Enterprises (ASUSE), conducted by the Ministry of Statistics and Programme Implementation, has been added.

Although it is an annual report and not a high-frequency data set, it provides a more accurate picture of the unorganized sector.

The consumption side of GDP is typically measured using the cost of living index, such as the Consumer Price Index (CPI). For the cost of production, the Wholesale Price Index (WPI) is used. To understand how much producers are earning, the Producer Price Index (PPI) is considered. By combining these high-frequency indicators, one can infer other aspects of the economy as well.

Despite the availability of high-frequency data, there have not been significant changes in the high-frequency indicators themselves.