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10 September 2026

Double deflation debate in GDP methodology

The adoption of double deflation in GDP calculation is a major national policy change in economic methodology that directly impacts how India's growth and development are measured and reported.

1 min read Day 4 of 4 2 questions 2 prelims

Notes

  • Double deflation is a methodology used to calculate real GDP by removing inflation effects from both inputs (producers) and outputs (consumers).
  • The Ministry of Statistics and Programme Implementation (MoSPI) introduced double deflation in the new GDP series with 2023-24 as the base year.
  • The methodology is widely used internationally but was not utilized in the previous 2011-12 base year GDP series.
  • Proponents argue that the methodology is neither impractical nor difficult to implement, as it primarily requires the separation of inputs from outputs.
  • Critics have raised concerns regarding the methodology's application in the new series, noting that GDP growth rates under the 2023-24 base year are lower than those under the 2011-12 series.

Part of a longer story

This is day 4 of 4 in Congress criticism of GDP growth figures, which has been running since 3 September 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. What is the 'double deflation' method in national income accounting, and how does its implementation impact the calculation of real GDP compared to previous methodologies? 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. Discuss the significance of base year revisions in India's GDP calculation. How does the adoption of international best practices, such as double deflation, enhance the accuracy and transparency of macroeconomic data? 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. What does the 'double deflation' method in GDP calculation primarily involve?

  2. Which organization is responsible for introducing the double deflation method in the current GDP series with 2023-24 as the base year?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-09-10/double-deflation-debate-in-gdp-methodology