New Delhi [India], May 7 (ANI): The Ministry of Statistics and Programme Implementation (MoSPI) has updated the base year of the National Accounts to 2022-23 stating that the revision aims to 'more accurately capture the current structure of the economy' by using 'modern data sources and improved estimation practices with evolving international standards.'

In a release issued on Thursday, the ministry said States and Union Territories will now be required to adopt the new base year for compiling Gross State Domestic Product (GSDP), which will help ensure 'greater accuracy, consistency and comparability in assessing regional economic performance.'

The ministry has also finalized the Uniform Guideline for compilation of Gross State Value Added (GSVA) estimates with base year 2022-23.

According to the PIB release, the updated framework focuses on 'expanding data integration,' 'refining methodologies,' 'ensuring alignment with national aggregates,' and 'standardizing practices' across States and Union Territories.

The ministry said the revised system will incorporate 'administrative records, sectoral databases, and survey inputs to improve coverage and reliability.'

It added that the updated methodologies are aimed at 'better reflect(ing) the evolving economy, especially in emerging service sectors and unincorporated enterprises.'

MoSPI said the changes are important because GSDP is widely used for 'fiscal devolution, policy formulation, resource allocation, budgeting, performance assessment and inter-state comparisons.'

The statement noted that the Finance Commission uses GSDP estimates to assess 'the fiscal capacity and relative economic position of States while recommending the distribution of Central taxes among them.'

The ministry further said the Department of Expenditure under the Finance Ministry uses GSDP estimates for fixing borrowing limits of states under the fiscal responsibility framework.

To guide this transition, the Advisory Committee on National Accounts Statistics (ACNAS) constituted a Sub-Committee on Regional Accounts chaired by Ravindra H Dholakia, with members from State Governments, the Reserve Bank of India, NITI Aayog, academia and research institutions.

At present, 34 States and Union Territories are compiling GSDP estimates with base year 2011-12, except Lakshadweep, Dadra & Nagar Haveli and Daman & Diu.

MoSPI said it is making 'concerted efforts to onboard all States/UTs' under the new base year framework 'to ensure complete national coverage and uniformity in the compilation of Regional Accounts Statistics.' (ANI)