State GDP by the Spending Side: MoSPI's Common Framework for Measuring GSDP
The National Statistics Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI), released a draft guideline for compiling Gross State Domestic Product (GSDP) by the expenditure approach (measuring a state's economy by adding up spending on its goods and services).
The guideline uses the new national base year 2022-23, the same base year as the new all-India GDP series released on 27 February 2026.
It covers the spending parts of GSDP: Private Final Consumption Expenditure (PFCE), Government Final Consumption Expenditure (GFCE), Gross Fixed Capital Formation (GFCF), change in inventories (stocks), valuables and net exports.
A big gap it tries to fill: some states and Union Territories (UTs) already estimate government spending and investment, but no state or UT compiles PFCE (household spending) today.
Where direct state-level data are missing, the draft suggests using state-specific sources and allocation indicators, including administrative data, to split national totals across states and UTs.
The aim is to make GSDP estimates of all states consistent and comparable. Stakeholders can send comments until 28 October 2026.
Gross State Domestic Product (GSDP)
Gross State Domestic Product, or GSDP, is the total value of all final goods and services produced inside one state's borders in one year. It is the state-level version of India's GDP. Just as GDP tells us the size of India's economy, GSDP tells us the size of Maharashtra's, Bihar's or Telangana's economy. It is the most common way to compare how rich or how fast-growing different states are.
MoSPI's draft framework tries to add the spending side to every state's GSDP, starting with household consumption, which no state measures today. If states follow one common method under the 2022-23 base year, their GSDP figures will become more reliable and comparable. This matters because borrowing limits and Finance Commission transfers are both tied to GSDP.
National Income Accounting and GDP Measurement
National income accounting is the system a country uses to measure the size of its economy and how it changes. Its most famous number is Gross Domestic Product (GDP): the total value of all final goods and services produced within a country in a year. The system also tells us who produced the income, who earned it and who spent it. Think of it as the yearly account book of the whole country.
The new state framework brings the expenditure approach, so far used mainly for national GDP, down to the level of each state. By asking states to estimate PFCE, GFCE, investment and net exports on the 2022-23 base, MoSPI wants state accounts to follow the same national income accounting rules as India's GDP.
Administrative Data in Official Statistics
Administrative data is information the government already collects while doing its normal work, not through a special survey. Tax returns, GST filings, company registrations, vehicle registrations and provident fund records are all examples. Official statisticians reuse these records to estimate things like output, jobs and spending. Because the data already exists, it is cheaper and faster than running a new survey.
No state measures household consumption today, so MoSPI's draft relies on using administrative data and other indicators to share national estimates across states and UTs. How well these records reflect each state's real spending will decide how accurate the new state-level figures are.
- Draft guideline: compilation of GSDP by the expenditure approach, base year 2022-23, released by the NSO (MoSPI)
- Components covered: PFCE, GFCE, GFCF, change in stocks, valuables, net exports
- No state or UT currently compiles PFCE estimates
- Last date for comments: 28 October 2026
- Uniform Guideline for GSVA (base year 2022-23): draft on 7 April 2026, finalised in May 2026
- New national GDP series (base year 2022-23) released on 27 February 2026
- PFCE about 57.1% of GDP in 2022-23 (new series)
- 16th Finance Commission: state fiscal deficit limit 3% of GSDP; "contribution to GDP" criterion with 10% weight