ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Why Not the Double Deflation Method for Estimation?

Gross Value Added

To estimate gross value added for the manufacturing sector, the 2011-12 National Accounts Statistics series follows the "single deflation" instead of the "double deflation" method. In this note, it is argued that the double deflation method estimates come closer to the Index of Industrial Production growth estimates, and that this reinforces the view that gross value added of manufacturing is overestimated in the 2011-12 series. This has an impact on overall GDP growth numbers, which too end up lower than in the new series.

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