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New method to calculate the Gross Domestic Product (GDP) has two key elements: new base year and market price.
It is a normal practice to change the base year once in five years.
The new base year will be 2011-12 against the previous base year of 2004-05.
Earlier, calculation was based on the factor cost or costs of production. Now, keeping in line with international practices, tabulation will be done on the basis of market price or the price which consumer pays. This is also called Gross Value Addition (GVA).
New method also includes more detailed data on corporate activity, newer surveys of spending by households and informal businesses and taxes paid (after deducting subsidy).
This changes growth estimate for 2013-14 to 6.9 per cent from 4.7 per cent.
Similarly, the number for 2014-15 is likely to be 7.4 per cent against 5.5-6 per cent.
Growth estimate for 2015-16 has also been made on new series and it is likely to be 8.1 to 8.5 per cent.
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