1. Estimate committee of Parliament has said the current manner of measuring GDP needs an overhaul as it gives incomplete estimation of economic activity.
2. Need for change in GDP:
- It does not measure the depletion of natural resources.
- It did not incorporate the economic contributions of women in running households and maintaining accounts
- It did not measure whether an increase in GDP resulted in an increase in happiness
- It does not factor the change in the output quality due to technological advances
- It does not factor the impact of artificial intelligence in employment.
Chief Economic Advisor’ view
3. The Chief Economic Advisor said GDP as an indicator of measuring economy’s growth has many deficiencies.
4. The committee noted that while NITI Aayog had acknowledged that efforts must be made to ensure that GDP growth is combined with sustainability, it had so far not suggested any ways to achieve this.
5. Committee’s recommendation
To evolve parameters to gauge the environmental resource decay and replenishment efforts made to compensate the loss and also to capture these aspects in measuring GDP and other economic parameters.