The central government of India is gearing up to bring out city-level Gross Domestic Product (GDP) data in a bid to stimulate investment and assist municipal bodies in generating funds for infrastructure requirements. This initiative is largely motivated by the growing contribution of urban India to the national GDP. According to the Housing and Urban Affairs Ministry, cities are likely to account for 75% of India’s GDP by 2020, a substantial increase from 2011 when urban regions contributed 60% to the national GDP.
Feasibility Study and Approach
To aid in this endeavour, the Economist Intelligence Unit (EIU), a global business intelligence leader and research division of The Economist Group, conducted a feasibility study on various models to calculate city-level GDP. Post study, the EIU proposed a top-down approach based on sectoral income data for the computation of city-level GDP. This approach is touted as a viable long-term strategy as it balances detail with resource-effectiveness. However, the Unit acknowledged possible challenges in meeting the data requirements. In light of such difficulties, a top-down model that utilizes household expenditure data is suggested as a more feasible short-term solution.
City-Level GDP: A Catalyst for Investment
Unveiling city-level GDP data is anticipated to boost investments in urban India, thereby facilitating infrastructural development steered by municipal bodies. Notably, recent studies by institutions like Brookings have reported impressive GDP growth rates in several Indian cities, with Hyderabad (8.7%) and Surat (7.9%) matching pace with the fastest growing Chinese cities that dominate the global list.
Understanding GDP
Gross Domestic Product (GDP) serves as a comprehensive quantitative metric of a nation’s total economic activity. More precisely, it denotes the monetary value of all goods and services manufactured within a country’s geographic borders over a defined time frame.
GDP Project Timeline
Subject to approval, the project for computing city-level GDP is slated to initiate by the end of this year. This approach not only showcases the economic prowess of individual cities but also outlines a roadmap for targeted investment and infrastructural development.
About the Economist Intelligence Unit (EIU)
Established in 1946, the EIU is recognized as the world’s leading provider of international business intelligence. This division of The Economist Group offers in-depth research and analysis, thereby delivering critical insights on a global scale.
The concerted efforts of the Central Government and distinguished bodies like the EIU mark an unprecedented step in accentuating the economic significance of urban India, thereby paving the way for prospective investment opportunities and infrastructural advancements.
