Is India missing billions in its GDP?

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Issue: India’s GDP, especially at the district level, may be severely underestimated due to reliance on outdated top-down methods.
• Current Method: GDP is primarily estimated using the Production Approach via Gross Value Added (GVA) from primary, secondary, and tertiary sectors. For non-agricultural sectors, a top-down approach is used — distributing national estimates to states/districts using proxies like employment data.
• Problem: This assumes uniform economic activity and ignores local variations, leading to flawed policy decisions and resource allocation.
• Bottom-up Pilot (U.P.):
• Conducted in 4 districts: Kanpur, Gorakhpur, Varanasi, Meerut.
• Used Labour Force Survey (LFS) & Survey of Unincorporated Sector Enterprises (SUSE).
• Found real GVA was nearly double the official estimate:
• Example: Meerut’s manufacturing GVA was 147.6% higher than earlier estimates.
• Implications:
• Skewed regional development assessments.
• Misdirected public investments.
• Undervalued economic potential in many districts.
• Way Forward:
• Nationwide bottom-up GDP estimation needed.
• Investment in local statistical infrastructure, trained enumerators, digital tools, and monitoring.