Gross Domestic Knowledge Product: What is it, what is the 2021 idea govt is reviving

Sood underlined the importance of shifting from economic indicators to a knowledge-centric measurement approach, by noting that a refined methodology for GDKP would better capture the contributions of knowledge-driven sectors, innovation, and intellectual assets to India’s economic growth.

Satellite Account

At present, all expenditures on Intellectual Property Products (IPP) are recorded under Gross Fixed Capital Formation (GFCF) — the indicator for capital investments in the GDP dataset for the economy. MoSPI Secretary Saurabh Garg said the session was being held to explore if a satellite account to measure the knowledge base of an economy can be worked out. MoSPI has been working with various ministries in compiling satellite accounts, namely tourism satellite accounts, culture satellite accounts, ocean and blue economy accounting, he said.

It was discussed that a formulation to capture the knowledge economy is essential but not available. MoSPI will form a technical committee to evaluate the proposal and provide guidance on measuring the knowledge economy.

NITI Proposal

GDKP was discussed earlier in 2021 when NITI Aayog made a presentation on the concept note. The National Statistical Commission had pointed out then that the concept note did not provide the methodology for capturing the data and computation of GDKP. “This exercise would require not only identification of knowledge parameters but it also requires tweaking of parameters which would reflect the real status of the outcome,” it had said, adding that the overall concept has a lot of subjectivity and requires further elaboration.

MoSPI had also noted that the concept paper suggested the GDKP would serve as such an indicator supplementing the GDP measure, but fell short of specifying how it is going to supplement the GDP in measuring welfare. “Data for GDKP may not be readily available and in such circumstances perception based surveys would have to be conducted. A portion of GDKP is already being captured in GDP. Although GDKP may augment the GDP, integrating GDKP and GDP would require a proper methodology,” MoSPI had said.

After a review by NITI Aayog in August 2021, the project was then shelved.