India will change the base year for calculating its Gross Domestic Product (GDP) from 2011-12 to 2022-23, as announced by Statistics Minister Rao Inderjit Singh in a written reply in Parliament on Monday. This shift aims to update the methodology used to measure economic growth and will reflect the more recent economic data.
To implement this change, the government has set up an advisory committee. This group will include government officials, members from the Reserve Bank of India, and academic experts. Their role will be to identify new data sources and offer guidance on the revised methodology, which is expected to enhance the country’s statistical system.
The decision to update the base year comes as analysts have been urging for faster GDP data releases and a revision of the base year for a more accurate representation of the economy. In response to such concerns, the government recently moved the release times of GDP and inflation data to earlier in the day, allowing economists more time to analyze the figures.
The revision follows global best practices by recognizing the need to update GDP calculations regularly to reflect changes in spending habits, industry sectors, and new industries. The updated framework will use data from 2022-23 to ensure that economic decisions and analysis are based on the most current information.
In addition, the Ministry of Statistics and Programme Implementation (MoSPI) has introduced measures to improve India’s statistical system. These steps include standardizing data formats for better quality, using administrative records to improve accuracy, and starting a new Economic Census to gather detailed data on business activities.
Starting in January 2025, MoSPI will release monthly reports from the Periodic Labour Force Survey (PLFS) to provide more regular updates on employment trends. These changes are designed to make India’s statistical system more efficient and reliable, giving policymakers and other stakeholders access to timely, high-quality data.
Last week, senior official Saurabh Garg emphasized the importance of using data for decision-making, while also addressing challenges in getting survey participation, especially in wealthier urban areas. Ensuring greater participation and consistent data collection is key to improving India’s statistical system.
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