NEW DELHI: India’s economy is likely to swell in absolute terms as the government embarks on a long-overdue exercise to add parts of it that have been ignored when it comes to calculating gross domestic product. The first set of data based on the new series, for the quarter ending December, will be released on January 31 next year.Some estimates suggest the current survey underestimates the size of the $1.87-trillion economy by 2-3 per cent while others suggest the gap could be even wider. The government is looking to broaden coverage of agriculture and corporate data in the national accounts, with the base year being revised from 2004-05 to a more recent 2011-12. All these efforts are aimed at helping the government get the numbers right first time around, rather than having to substantially revise them in subsequent iterations as more data comes in, making things easier for policy-makers."We are targeting January 2015 for the release of the new GDP base. A (massive) exercise is underway to estimate various sectors. The methodology will also undergo a change," said a government official.The Central Statistics Office (CSO) will release new series data for 2011-12, 2012-13 and 2013-14 when it issues the revised estimates early next year, so that the numbers are comparable. The Indian economy has shown signs of reviving after two successive years of below-5 per cent growth when it hit decadal lows.India's GDP expanded by a promising 5.8 per cent in the April-June quarter. The multi-pronged exercise will not just focus on revising the base but also increase data sources for all components besides tapping newer sources.The facelift is based on the recommendations of the Advisory Council on National Accounts headed by professor K Sundaram and was prompted by the need to address inaccuracies in data, thereby making it more reliable for policy-making.Economists say widening the national accounts coverage in different sectors will likely push up India’s absolute GDP numbers sharply from the Rs 113 lakh crore registered in 2013-14. India is currently the 10th-largest economy in the world in nominal GDP terms. In purchasing power parity (PPP) terms, it is the third-largest economy, right behind the US and China."With the revision in place, the size of the economy will definitely look bigger, as today a large part of GDP data goes unreported, especially the rural and agri sector, which will get better representation now. This is apparent from the disconnect between GDP and inflation," said Soumya Kanti Ghosh, chief economic advisor, State Bank of India.YES Bank Chief Economist Shubhada Rao said, "We have always maintained that India’s GDP runs the risk of getting understated than overstated. A lot of activities do not come in the official purview of the data. The government's latest move is to plug the obvious gaps. There are many industries that have come on board but still do not get captured."The CSO had formed five subcommittees to look into various aspects of GDP revision, of which the first submitted its report last week. The sub-committee on agriculture headed by Mahendra Dev suggested capturing state-wise production, price and input cost for 244 horticulture crops and mooted a nodal agency in the ministry of agriculture to consolidate data on production, area, yield rate and input costs at the state and national levels. The sub-committee has recommended coverage of all agricultural crops to estimate GDP as against 41 covered now."Efforts should be taken to cover more items and make use of the analysed results for compilation and cross-validation,” Dev told ET. Besides, the CSO is also looking to source corporate data directly from the ministry of corporate affairs' (MCA's) database of more than 3.5 lakh companies to estimate GDP. The CSO currently relies on financials of about 2,500 firms compiled by the Reserve Bank of India to get an estimate for the entire industry."Use of MCA database will considerably change the manner in which we estimate corporate sector data," said the government official cited above. It will also help improve accuracy, particularly for the services sector, which accounts for about 60 per cent of GDP.The MCA data set has companies filing returns, balance sheets and profit & loss statements. It will also help capture public-private partnership projects, some of which CSO is unable to record under national accounts. The CSO is also working on changing the compilation of financial services not directly measured, such as advisory and through cheque books."Right now physical measures are used, which is not apt to accurately capture the indirect services. We now plan to do it in a more scientific manner," said the official. The CSO is also planning to refine the methodology to better capture the value added per worker in the unorganised sector by factoring in the contribution of people at different levels of industry.On the expenditure side of the national accounts, where accuracy has always been questioned, measures are being discussed to improve data quality. The CSO has also taken up the issue of delay in submission of data by state governments as final consumption expenditure is based on numbers provided by the central and state governments."We have written to all states to strictly abide by the deadline to submit government expenditure data," said the official. The quarterly numbers for private final consumption expenditure are estimated from the production side, which may not be the best way."We are examining how best we can make it more realistic," the official said. Gross fixed capital formation, a proxy for investment, is also expected to result in more stable quarterly numbers once the revised Index of Industrial Production (IIP) addresses the issue of volatility in capital goods output.A panel headed by former Planning Commission member Saumitra Chaudhuri had recommended using "work-in-progress" data for capital goods rather than the final factory gate data, which will most likely be implemented in the new IIP, making GDP data less subject to extreme fluctuations.The revised indices for industrial production, wholesale inflation and consumer inflation with the base year 2011-12 will be made available by mid-2015. All this will make for greater accuracy as GDP data undergoes drastic revisions after a year as more data flows in. For instance, GDP growth for 2010-11 was revised to 9.3 per cent from 8.4 per cent and finally down to 8.9 per cent. Similarly, 2011-12 growth was revised up from 6.2 per cent to 6.7 per cent after taking into account data from the Annual Survey of Industries.