"Conventional GDP accounting under-captures the knowledge economy." Discuss the challenges of measuring knowledge products and assess MoSPI's 'family of thematic accounts' approach.

Most knowledge, such as R&D, data, AI models and creative output, is intangible, rarely sold and often produced inside the firm that uses it. Conventional GDP therefore records only part of its value. MoSPI's Committee on Knowledge Systems, chaired by Ratan P. Watal, has proposed a framework to measure it [1]. The framework is a sound step but still incomplete.

Challenges in measuring knowledge products

• No market price: firms collect and use most data themselves. Statisticians then value it by the cost of producing it, which undervalues datasets that become worth far more once used to train AI [2].
• AI blurs input and output: counting the data, the model and its output separately can count the same value twice or thrice. The boundary conditions "knowledge as input" and "economic value" need sharper rules [1].
• Codification bias: the codification and identifiability tests may leave out oral traditional knowledge, such as tribal medicine or farmers' seed selection, unless it is written down, as the TKDL does [1].
• Changing standards: the 2025 SNA, adopted at the UN Statistical Commission's 56th session, updates the 2008 SNA to account for digitalisation, including data as an asset [3].

Assessment of the 'family of thematic accounts'

Strengths

• Feasible: it uses seven priority accounts instead of one "knowledge GDP" figure: human capital, R&D, creative economy, AI systems, data and databases, frontier technologies and the digital economy [1].
• Comparable: the accounts follow SNA 2025, so they can be benchmarked against other countries [1][3].
• Federated design: system integrators, domain ministries and key partners (States, regulators, academia) each work within their own mandate [1].

Limitations

• Measurability bias: the "cost-effective measurability" criterion puts data-rich areas such as the digital economy first. Traditional knowledge has no priority account at all [1].
• Self-assessment risk: ministries measure their own sectors, and the integrator has no stated power to audit them [1].
• Measuring is not fixing: spending on R&D (GERD) has fallen as a share of GDP since 2009–10, to about 0.64% in 2020–21, far below the 2% target [4].
• No effect on headline GDP: satellite accounts show where value sits but do not change official GDP.

Thematic accounts break an unmeasurable whole into parts that can be measured. MoSPI should publish each account's method before its numbers and label weak accounts "experimental". It should also give States funded data-sharing roles and present each account alongside the responsible ministry's budget. That would make India's knowledge economy visible and accountable, supporting SDG-9 and Viksit Bharat.