Capitalization of Data in The Indian National Accounts
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Authors
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Gulab Singh
United Nations Statistics Division, New York, USA
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A.C. Kulshreshtha
Ministry of Statistics and Programme Implementation, Govt. of India, New Delhi
Keywords:
Capitalization of data, Data as asset; Digital economy; Gross Fixed Capital Formation; GDP; National Accounts Statistics; Measurement framework; Supply-Use Tables; Sum-of-costs valuation; Depreciation.Abstract
The 2025 System of National Accounts (SNA) introduces a major conceptual advance by recommending the capitalization of organized, reusable
data and databases as produced fixed assets within Intellectual Property Products. This paper examines the conceptual foundations, measurement
framework, and practical implementation of this recommendation in the context of India’s national accounts. It traces the evolution of the SNA asset
boundary, clarifies the data–information chain, and establishes consistent terminology for data-related concepts.
The paper develops an operational methodology based on the sum-of-costs approach for estimating own-account data assets, supported by an explicit
accounting identity linking labour inputs, involvement rates, and adjustment factors. Drawing on India’s existing statistical infrastructure—Periodic
Labour Force Survey (PLFS), Occupational Wage Survey (OWS), Annual Survey of Industries (ASI), Annual Survey of Unincorporated Sector
Enterprises (ASUSE), Goods and Services Tax (GST) data, and Balance of Payments (BoP) statistics—the study demonstrates how occupation
specific labour costs and non-labour inputs can be combined to estimate gross fixed capital formation (GFCF) in data assets.
A numerical illustration using hypothetical data is provided to demonstrate the full estimation sequence from nominal investment to real GFCF and
net capital stock using the perpetual inventory method (PIM). In addition, a sensitivity analysis evaluates the robustness of estimates under alternative
assumptions regarding involvement rates, adjustment factors, and service lives.
Evidence from international studies and ADB pilot estimates suggests that data assets account for approximately 0.8 to 2.7 per cent of GDP, with
India exhibiting rapid growth in data-related investment. While the short-term impact on GDP growth is modest, capitalization significantly enhances
the measurement of capital stock and productivity. The paper concludes with practical recommendations for the National Statistical Office (NSO) to
implement data capitalization in India’s national accounts, emphasizing methodological transparency, use of existing data systems, and the need for
continued empirical refinement.
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