Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before the year 2015 and after the year 2015. (UPSC 2021)

India’s GDP computation changed significantly in 2015. The shift was not only in the base year, but also in the method of measuring output, sector coverage and data sources.

• Before 2015: GDP was reported mainly at factor cost, using the 2004–05 base year. Sector estimates depended more on old statistical series and an establishment-based approach.
• After 2015: India adopted GDP at market prices as the headline measure, with GVA at basic prices used to assess sectoral growth. The base year was revised to 2011–12.
• Formula change:
  

  GDP at Market Prices = GVA at Basic Prices + Product Taxes − Product Subsidies

• Data upgrade: The new series used the MCA-21 database, improved coverage of financial services, and wider inclusion of informal and unorganised activities.

Thus, post-2015 GDP became more comprehensive, better aligned with the SNA 2008, and more representative of India’s changing economy.