In a significant move to enhance the accuracy and transparency of India's economic measurement, the Ministry of Statistics and Programme Implementation (MoSPI) has announced plans to eliminate the long-debated 'discrepancies' component from its Gross Domestic Product (GDP) calculations. This change is part of a comprehensive revision of the national accounts data, which will also introduce a new base year of 2022-23.
A New Era for Economic Measurement
The first official GDP numbers under this revamped series are scheduled for release on February 27, 2026, covering the October-December 2025 quarter. Furthermore, MoSPI has committed to publishing a complete 'back series' of GDP estimates aligned with the new methodology by February 2027. The ministry has invited public and expert comments on its second discussion paper outlining these methodological improvements until January 7, 2026.
The decision to remove the discrepancies item addresses a persistent point of confusion among economists, investors, and policymakers. Currently, India's GDP is calculated using two primary methods: the production (or income) approach and the expenditure approach. Due to differences in data sources, coverage, and reporting timelines, the figures from these two methods rarely match perfectly. The gap is presently recorded as 'discrepancies' within the expenditure-side calculation.
The Problem with 'Discrepancies'
These discrepancies can be substantial and volatile, complicating the analysis of true economic momentum. A prime example was seen in the July-September 2025 quarter, when India's economy posted a surprising 8.2% real growth. In that period, the discrepancies component amounted to a staggering Rs 1.63 lakh crore, or 3.3% of the GDP in constant prices. In nominal terms, however, it was a negative Rs 2.46 lakh crore (-2.9% of GDP), highlighting the inconsistency.
"It's very good if discrepancies are done away with," remarked Kunal Kundu, India Economist at Societe Generale. He noted that while discrepancies should ideally shrink over successive revisions, they have sometimes increased in magnitude, making it "very difficult to understand what has been driving GDP growth."
The magnitude of these gaps has seen significant swings, especially post-pandemic. For instance, discrepancies shifted from -3% of GDP in January-March 2023 to a positive 3.3% in the very next quarter (April-June 2023).
The Path to Greater Accuracy
To eliminate this statistical gap, MoSPI plans to integrate Supply and Use Tables (SUTs) into the annual accounts compilation process. SUTs provide a detailed framework that balances the total supply of goods and services (from domestic production and imports) with their uses (consumption, investment, exports). This balancing act is designed to "ensure that discrepancies are limited in the early estimates and finally eliminated when [a] full set of data becomes available," as per the ministry's discussion paper.
The move is expected to reduce large future revisions to GDP growth figures, which often occur when discrepancy-related data is reconciled. While applauding the step, economists like Kundu caution that this is just one aspect of improvement, pointing out that the current series also relies on outdated survey data, making accurate calculation a complex challenge.
This overhaul represents a critical step towards modernizing India's statistical system, aiming to provide a clearer, more reliable picture of the world's fastest-growing major economy for better policy formulation and investment decisions.
