Measuring the economy, from the bottom up

The significance of district-level GDP goes well beyond correcting a measurement gap. Districts are where industries open and close, where credit reaches or fails to reach, where labour migrates. 4 min readJun 18, 2026 06:21 AM IST First published on: Jun 18, 2026 at 06:21 AM IST The recent governing council meeting of NITI Aayog was notable as it signalled a decisive shift in how India intends to think about economic growth itself. The Prime Minister’s call for district-level GDP estimates that intend to measure the economic performance of each of the country’s more than 700 districts is the formal institutionalisation of an idea whose time has arrived. For most of the post-Independence period, the architecture of economic measurement was built upward. National aggregates were primary; states disaggregated them; districts and villages were residual. The assumption was that growth percolates. We have learnt that it does not. As per NITI Aayog’s SDG India Index, the top 100 districts by GSDP contribute roughly 40 per cent of India’s output; the bottom 400 contribute under 15 per cent. The Aspirational Districts Programme, launched in 2018, targeting 112 lagging districts, improved outcomes in several of them, but operated without a robust economic baseline.What gets measured gets tracked in terms of economic growth; district-level GDP changes the cumulative state-level plans. K V Raju’s work in the context of Uttar Pradesh is such an attempt; I have had the occasion to examine this deficit from close quarters. During my tenure as vice chairman of the Madhya Pradesh State Policy and Planning Commission, the fragility of sub-national data became apparent. How many of the 4,677 factories registered in Madhya Pradesh actually operated after the Covid crisis? The Annual Survey of Industries as of 2021, covering a sample of only 60 units, could not answer it. District-level estimates across India are still largely derived from state-level coefficients projected downward; this is a methodological inheritance that has undermined policy precision for decades. The significance of district-level GDP goes well beyond correcting a measurement gap. Districts are where industries open and close, where credit reaches or fails to reach, where labour migrates. The vision of districts as export hubs, ready for participation in global value chains, cannot be operationalised without knowing what a district actually produces. The 15th Finance Commission (FC) urged states to channel resources more directly to district administrations; the 16th FC has continued in this vein. Yet resources transferred without a clear picture of local needs often diffuse without traceable impact. District GDP can provide the analytical scaffolding for fiscal devolution. The informal economy presents the most immediate methodological challenge: Agriculture, petty trade, construction and domestic services remain unorganised and difficult to enumerate. MoSPI has been working on methodological reforms, and state statistical directorates, once adequately staffed, can contribute to a bottom-up data architecture. There is a larger argument that the NITI Aayog meeting has implicitly made: That the journey to Viksit Bharat by 2047 cannot be charted at 30,000 feet. Growth that bypasses districts is growth that bypasses people. Reversing distress migration and converting India’s demographic dividend into productive economic force requires granular, district-level knowledge. GDP is an incomplete measure of welfare, but it is the indispensable starting point. Once districts are on the map, measuring wellbeing alongside income becomes possible. The participation of all 28 chief ministers for the first time reflects a maturing of cooperative federalism that localisation demands. States must own the data, build the capacity, and commit to the transparency district GDP will require. Sukhamoy Chakravarty’s Development Planning: The Indian Experience (1987) makes a central point: That