• Reviving an idea that was shelved in 2021, the government is looking to capture the knowledge economy as a metric to complement the gross domestic product (GDP).
  • It intends to develop a framework to comprehensively capture the impact of knowledge on economic and social life in the country.

Discussion on GDKP by NITI Aayog in 2021

Presentation of Concept Note:

  • In early 2021, NITI Aayog presented a concept note on Gross Domestic Knowledge Product (GDKP).
  • The aim of this note was to consider the parameters of GDKP and understand how a knowledge-based economy can be measured.

Data Capture Problem: 

  • NITI Aayog mentioned in this concept note that data capture for GDKP can be a challenging task. 
  • As it is different from traditional economic indicators, there were no clear guidelines regarding the availability of data and the process of collection.

Ambiguity of Calculation Process: 

  • The concept note also did not provide clarity on the process of calculating GDKP. 
  • The note discusses how GDKP will be measured correctly, but did not mention specific methodologies or parameters for it.

Need for coordination with GDP: 

  • NITI Aayog had also clarified that there was no clear direction on how GDKP would be coordinated with GDP. 
  • While there was a plan to bring GDKP as a complement to GDP, it was not explained how the two indicators would work together and how each other’s contribution would be measured properly.

Refinement as required: 

  • NITI Aayog acknowledged that the concept needed some refinement. 
  • In particular, there is a need to identify the right parameters to measure GDKP and a coherent framework to implement it practically, which will be defined in detail in the coming days.

Concerns of National Statistical Commission:

  • The National Statistical Commission also commented that it would not be easy to identify parameters for GDKP.
  • This would require new parameters that are not only accurate but also clearly reflect the real situation.
  • The Commission also pointed out that the concept of GDKP has more subjectivity, and needs further elaboration.

Relationship between GDKP and GDP:

  • MoSPI clarified that GDKP will act as a complement to GDP.
  • However, it is not yet clear how it will be integrated with GDP and whether it will help in measuring well-being.
  • The objective of GDKP is to better measure and understand the contribution of knowledge-based activities to the Indian economy.
  • There is a need to develop a proper methodology to integrate GDKP with GDP, so that the right synergy can be established between the two.
  • This will ensure that both indicators complement each other and accurately measure all aspects of the Indian economy.

Data availability and need for survey:

  • MoSPI also acknowledged that data for GDKP may not be readily available, as it is different from the traditional GDP dataset.
  • This situation may require conducting perception-based surveys, which will help the government to implement this new parameter.

Published by Pragyanxetu

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