GDP: Double Deflation
MoSPI is adopting double deflation or volume extrapolation, especially where data is available. This approach doesn't always lead to lower GDP estimates,
as it depends on how input and output prices fluctuate. The existing Wholesale Price Index (WPI) has already undergone significant modifications. The aim is to refine the GDP calculation process.
PPI: A New Dawn?
The development of a Producer Price Index (PPI) is underway, and it will be introduced soon. The key difference between the WPI and the PPI is the inclusion of export product prices. An expert group is working on the PPI, making it a desirable addition to the economic framework. This change will influence how India views its economic performance.
CPI and Services Boom
Services now make up a considerable portion of the Consumer Price Index (CPI). With nearly one-fourth of CPI comprising services, with 62 service items aggregated into 40 types. The ongoing CPI base revision, expected early next year, will expand this to over 90 items and 50 categories. This reflects the changing economic landscape.
Growth: High-Frequency Data
High-frequency indicators reveal a positive outlook. GST collections in April-June 2025 of the fiscal year 2025-26 (FY26) rose 11.8% year-on-year (YoY), e-way bills increased by 20.5%, and UPI transactions saw a 21.6% rise in value and a 37.5% jump in number. These figures highlight widespread economic strength.
Inflation: Controlled Measures
Government actions such as Bharat brand retail sales, wheat stock limits, decreased customs duties on pulses and oil, and a reduced repo rate have helped keep inflation low. These trends are also reflected in the GDP deflators. Approximately 40% of quarterly GDP depends on volume indicators like agricultural output.
