MoSPI Begins Major Initiative to Measure Contribution of Knowledge Economy to GDP

The Ministry’s initiative represents an important step toward developing a more comprehensive understanding of modern economic growth and productivity.

The Ministry of Statistics and Programme Implementation (MoSPI) has launched a major initiative to develop a framework for measuring the contribution of knowledge and knowledge-based products to the Indian economy, marking one of the country's first comprehensive efforts to formally assess the economic value of knowledge systems.

The exercise comes amid rapid technological transformation, increasing demand for advanced skills, organizational innovation, and the growing importance of intellectual and digital assets in modern economies.

Officials say the initiative aims to help India better understand how knowledge creation, innovation, traditional knowledge, research, and intellectual property contribute to economic growth and national development.

Rising Importance of Knowledge in the Economy

MoSPI noted that rapid technological advancements and changing global economic structures have made knowledge a central driver of economic activity.

According to the Ministry, modern economies increasingly depend on:

• Research and development

• Innovation ecosystems

• Digital technologies

• Intellectual property

• Skilled human capital

• Knowledge-intensive industries

As a result, traditional economic measurement systems may no longer fully capture the true contribution of knowledge-based activities to GDP and broader economic performance.

The Ministry stated that there is now a growing need to assess how knowledge contributes to productivity, innovation, competitiveness, and long-term economic growth.

India Developing a New Framework

In response to this challenge, MoSPI has undertaken a novel initiative to create a framework capable of measuring the contribution of knowledge and knowledge products to the Indian economy.

Officials noted that there are very few comparable global precedents for such a framework, making the exercise both innovative and complex.

The initiative involves extensive consultation with:

• Experts

• Academics

• Industry representatives

• Think tanks

• Government ministries

• Policy institutions

The objective is to create a robust methodology that can capture the evolving dynamics of the knowledge economy in India.

Technical Advisory Group Constituted

The effort originated from recommendations made during a meeting chaired by Principal Scientific Adviser to the Government of India, Prof. Ajay Kumar Sood, in February 2025.

Following the meeting, a Technical Advisory Group (TAG) was established under the chairmanship of Dr. R. Balasubramaniam, who was then Member of the Capacity Building Commission.

The TAG includes representatives from:

• Academia

• Industry bodies

• Think tanks

• Central Government ministries

• Research institutions

The group was tasked with helping shape the conceptual and methodological framework for the initiative.

Brainstorming Workshop Focused on Knowledge Taxonomy

In September 2025, MoSPI organized a brainstorming workshop focused on developing:

• A taxonomy of knowledge products

• Quantitative indicators

• Data sources

• Measurement methodologies

The discussions explored ways to measure the contribution of various knowledge-related sectors and activities to India's GDP.

Participants also examined challenges related to defining and categorizing knowledge assets within economic accounting systems.

Base Paper Prepared by Ministry

Based on inputs from the Technical Advisory Group and consultations with experts, the Ministry has now prepared a "Base Paper on a Framework for Measuring the Contribution of Knowledge and Knowledge Products to the Indian Economy."

The paper serves as the foundation for developing a future actionable policy framework.

According to MoSPI, the paper examines both conceptual and practical aspects of measuring the knowledge economy.

Four Major Chapters in the Base Paper

The Base Paper is divided into four chapters covering different dimensions of knowledge systems and economic measurement.

Chapter 1: Knowledge and Knowledge Economy — Conceptual Considerations

The first chapter examines:

• The dimensions of knowledge

• Knowledge creation processes

• Dynamics of knowledge systems

• Emerging discussions on knowledge and economic growth

It explores how knowledge functions as an economic asset in contemporary economies increasingly shaped by innovation and technology.

Chapter 2: Available Methodologies and Quantities

The second chapter reviews existing global methodologies for evaluating knowledge-related economic activities.

It focuses on areas such as:

• Research and development (R&D)

• Intellectual property rights

• Digital economy

• Academic output

The chapter also presents various metrics and indicators that can help value these components of knowledge.

Chapter 3: India's Traditional Knowledge — Dimensions and Challenges

The third chapter focuses specifically on India's vast traditional knowledge systems and their role in the economy.

It examines:

• Traditional knowledge practices

• Cultural and indigenous knowledge systems

• Preservation and documentation efforts

• Classification initiatives

The chapter also reviews literature and presents potential metrics for measuring the economic contribution of traditional knowledge.

Officials said this component is especially important given India's rich heritage in areas such as:

• Ayurveda

• Traditional medicine

• Agriculture

• Handicrafts

• Indigenous practices

• Cultural knowledge systems

Chapter 4: Valuation Framework for Knowledge Economy

The fourth chapter presents an initial framework for consolidating evidence and measuring the overall contribution of knowledge to the economy.

It seeks to define the essential components of the knowledge economy and establish a foundation for future policy development and measurement systems.

New Committee on Knowledge Systems Formed

As the next phase of the initiative, MoSPI has constituted a "Committee on Knowledge Systems."

The committee will be chaired by Shri Ratan P. Watal, former Member Secretary of the Economic Advisory Council to the Prime Minister.

The committee's mandate is to prepare an "Actionable Policy Paper" based on the framework outlined in the Base Paper.

Officials said the new policy paper will help operationalize methodologies and recommend future institutional and policy measures.

Public Consultation Process Begins

MoSPI has invited comments and suggestions from:

• Experts

• Stakeholders

• Academic institutions

• Industry bodies

• General public

as part of the consultation process for refining the framework.

Feedback can be submitted to the Ministry through designated email addresses by 15 June 2026.

Officials said public consultation will help strengthen the final framework and ensure broader stakeholder participation.

Reflecting Shift Toward Knowledge-Driven Economy

The initiative reflects India's broader transition toward a more innovation-driven and knowledge-intensive economy.

Over the past decade, India has increasingly focused on:

• Digital transformation

• Artificial intelligence

• Research and innovation

• Startup ecosystems

• Intellectual property creation

• Advanced technology sectors

Government policymakers believe stronger measurement systems are needed to better understand and support these evolving economic drivers.

Importance for Future Policy and Planning

Experts say measuring the contribution of knowledge to GDP could have important implications for:

• Economic policymaking

• Innovation funding

• Research investment

• Education planning

• Technology strategy

• Intellectual property policies

A robust framework could also help governments better evaluate the economic impact of sectors that are traditionally difficult to quantify through conventional national accounting methods.

India Positioning Itself in Emerging Global Debate

Globally, economists and policymakers are increasingly debating how traditional GDP systems can better account for intangible assets and knowledge-based value creation.

India's initiative positions the country among a growing group of economies exploring new methods to measure:

• Innovation ecosystems

• Digital assets

• Human capital

• Intellectual property

• Data-driven economic activity

Officials say the framework could eventually contribute to broader international discussions on redefining economic measurement in the digital and knowledge age.

Toward a More Comprehensive Understanding of Economic Growth

The Ministry's initiative represents an important step toward developing a more comprehensive understanding of modern economic growth and productivity.

By attempting to formally measure the value generated through knowledge systems, India hopes to better align future policy frameworks with the realities of a rapidly evolving global economy driven increasingly by innovation, technology, and intellectual capital.