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Back to GDP model from GVA
April 11 , 2018
2291 days
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- The Reserve Bank of India (RBI) switched back to the gross domestic product (GDP)-based measure to offer its growth estimates from the gross value added (GVA) methodology, citing global best practices.
- The GVA methodology gives picture of state of economic activity from producers’ side or supply side whereas the GDP model gives picture from consumers’ side or demand perspective.
- Globally, performance of most economies is gauged in terms of GDP model.
- The government had started analysing growth estimates using GVA methodology from January 2015 and had also changed the base year to 2018 from January.
- Even the Central Statistical Office had started using GDP as the main measure of economic activities since January 15, 2018.
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