Centre proposes 2022-23 as new base year for GDP

  • September 30, 2024
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Centre proposes 2022-23 as new base year for GDP

Sub: Eco

Sec: National Income

The Centre is proposing 2022-23 as the new base year for GDP calculations, with the first data expected to be published by February 2026. This revision comes under the Ministry of Statistics and Programme Implementation (MoSPI), and a similar base year revision is proposed for both the Consumer Price Index (CPI), which measures retail inflation, and the Index of Industrial Production (IIP), which tracks factory output growth.

Additionally, the Ministry plans to release flash employment-unemployment data starting in February 2025.

  • Proposed New Base Year: 2022-23
    • First GDP data based on the new base year to be published in February 2026.
    • Similar revisions proposed for CPI and IIP.
  • Criteria for Base Year Selection:
    • A key factor for choosing the base year is that it should be a “normal” year without significant disruptions.
    • Despite global challenges, 2022-23 was selected, factoring in the best possible normalcy.
  • Advisory Committee on National Account Statistics (ACNAS):
    • MoSPI proposed the change to the Advisory Committee, which includes 26 members, chaired by Prof Biswanath Goldar.
    • The committee consists of representatives from academia, the National Statistical Commission, Indian Statistical Institute (ISI), RBI, various ministries, and selected state governments.
  • New Data Sources for GDP Calculation:
    • Household Consumption Expenditure Survey 2023-24
    • Annual Survey of Unincorporated Sector Enterprises 2022-23
    • GST Data.
  • Last Base Year Revision:
    • The most recent base year change for GDP was in 2015, from 2004-05 to 2011-12.
    • The CPI’s base year was revised to 2012, and IIP’s to 2011-12.
  • Employment-Unemployment Data:
    • The first flash Periodic Labour Force Survey (PLFS) data is expected to be released in February 2025 for January 2025, with back-series data included for comparison.
    • The data will provide unemployment figures for rural, urban, and combined areas.
  • Technology Integration:
    • MoSPI is adopting advanced technology for data collection and dissemination.
    • e-Sigma, a cloud-based portal, is being used for data processing in surveys like the capex survey.
    • e-Sankhyiki portal aims to provide better data experience to the public.
  • Upcoming Surveys:
    • New surveys related to domestic tourism expenditure, national household travel, and health expenses will be part of the next National Sample Survey round.

This base year revision is intended to incorporate updated and more representative economic data for improving GDP computation and economic planning.

Change in Base Year for National Accounts (Historical Revisions)

1948-49 to 1960-61:

  • Changed in August 1967

1960-61 to 1970-71:

  • Changed in January 1978

1970-71 to 1980-81:

  • Changed in February 1988

1980-81 to 1993-94:

  • Changed in February 1999

1993-94 to 1999-2000:

  • Changed in January 2006

1999-2000 to 2004-05:

  • Changed in January 2010

2004-05 to 2011-12:

  • Changed in January 2015

Upcoming Base Year Revision (As per the text)

  • Proposed Change: From 2011-12 to 2022-23.
  • First Data Release with New Base Year: Likely in February 2026.
  • The change will also apply to other indices like Consumer Price Index (CPI) and Index of Industrial Production (IIP).

This proposal considers 2022-23 as a relatively “normal” year, despite global disruptions. Along with the new base year, new data sources, such as the Household Consumption Expenditure Survey 2023-24 and GST data, will be integrated into the GDP computation.

Centre proposes 2022-23 as new base year for GDP economy