India’s Ministry of Statistics and Programme Implementation (MoSPI) has announced that the upcoming revised GDP series (with base year 2022–23) will not include Unified Payments Interface (UPI) transaction data as part of the official estimation process. This revised series is expected to be released this week.
Why Was UPI Data Considered?
UPI transactions — covering huge volumes of digital payments — had been proposed as a potential alternative data source to help estimate one key component of GDP called Private Final Consumption Expenditure (PFCE), which tracks household spending. The thought was that transaction values and counts from UPI could reflect real consumption patterns in the indian economy.
Why UPI Data Won’t Be Used
MoSPI and its advisory committee decided not to use UPI data yet, citing several problems:
1. Unstable and Incomplete Coverage
UPI data is still unbalanced and evolving rapidly, so it doesn’t fully capture all household consumption patterns across the economy. Significant spending still happens through non‑digital means or outside UPI.
2. Classification Challenges
Most UPI transactions are tagged using broad merchant category codes. For example, a single code might cover a supermarket selling food, clothes, electronics, etc. — making it hard to assign spending accurately to specific consumption categories used in GDP.
3. Inclusion of Non‑Consumption Transactions
Some UPI transfers relate to non‑consumption activities (like debt servicing or transfers between accounts), which do not reflect consumer spending and therefore are not suitable for GDP calculations.
What the New GDP Framework Will Use Instead
Instead of UPI data, the revised methodology will:
- Rely on traditional and high‑frequency sources such as GST data, vehicle registrations (Vahan), household surveys, and administrative records.
- Improve price deflation techniques using more granular price indices from both Consumer Price Index and Wholesale Price Index.
- Update the base year and revise historical series to reflect current economic structure.
What This Means for India’s GDP Statistics
The decision reflects a cautious use of emerging wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital data in official statistics — acknowledging that while digital payments volumes are massive, they are not yet reliable or detailed enough for national accounts estimation. Analysts argue that once UPI data stabilises and becomes more representative, it might be re‑considered in future revisions.
In Short 🌐
✔️ India’s new GDP series will not use UPI transaction data.
✔️ The move is based on concerns about instability, classification issues, and incomplete coverage.
✔️ The revised GDP methodology will use other modern data sources and improved statistical techniques for more accurate economic measurement.
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