Possible UPSC Questions
Prelims (Objective)
- The Central government has announced that the new base year for India’s national‐accounts (GDP) series will be:
A) 2017-18 B) 2019-20 C) 2020-21 D) 2022-23 - Which organisation is primarily responsible for revising India’s national-accounts base year and methodology?
A) NITI Aayog B) RBI C) National Statistical Office (NSO) D) Economic Advisory Council to PM
Mains (150 words)
“Explain why periodic revision of the GDP base year is necessary. Discuss the methodological and policy implications of shifting the base year from 2011-12 to 2022-23.”
Quick Outline of Key Facts
- GDP base year: Benchmark year whose price and structural data underpin constant-price (real) GDP calculations; currently 2011-12, to shift to 2022-23.
- Release timeline: Revised series to be published 27 Feb 2026.
- Historical revisions: Base year updated seven times since independence (1960-61, 1970-71, 1980-81, 1993-94, 1999-2000, 2004-05, 2011-12).
- Purpose of revision: Integrate latest price structures, consumption patterns (Consumer Expenditure Survey), labour-force data (PLFS), new sectors, and compliance with UN System of National Accounts (SNA 2008).
- Institutional framework: National Statistical Office (formerly CSO) under MoSPI; first national-income estimates prepared by P.C. Mahalanobis committee (1951-54).
- Pending datasets: Consumer Expenditure Survey 2022-23, PLFS annual data, corporate MCA-21 filings, GSTN turnover data to refine sectoral weights.
Summary
Gross Domestic Product is India’s headline yardstick for measuring economic size and growth. To express real (inflation-adjusted) changes, statisticians anchor the series to a base year in which prices and structural weights are frozen at 100. India’s current benchmark—2011-12—is now over a decade old; much has changed since, from GST and digital payments to the pandemic-induced reordering of consumption. The Ministry of Statistics and Programme Implementation (MoSPI) therefore announced that all national-accounts aggregates will be re-benchmarked to 2022-23, with the back-casted series released on 27 February 2026.
Rebasing serves three objectives. First, it captures up-to-date price relatives so volume estimates are not distorted by outdated cost structures. Second, it widens coverage: GST and MCA-21 databases now map the unorganised and services sectors more accurately; PLFS provides annual labour inputs; the forthcoming Consumer Expenditure Survey 2022-23 will refresh household-consumption baskets. Third, it aligns India with the UN System of National Accounts 2008, improving cross-country comparability for indices such as the World Bank’s International Comparison Programme.
Historically, the Central Statistics Office (now NSO) has shifted base years roughly every five to seven years: 1967 (1948-49→1960-61), 1978, 1988, 1999, 2006, 2010 and 2015. Each change initially generates “statistical noise”—headline growth may appear faster or slower because sectoral weights alter. For instance, when 2011-12 replaced 2004-05, manufacturing’s share rose while agriculture’s fell, provoking debate. Similar scrutiny is likely in 2026, especially over pandemic-year effects and digital-economy valuation.
Policy stakes are high. A newer base influences fiscal ratios (debt-to-GDP, tax-to-GDP), poverty lines, GSDP allocations to States, and corporate-strategy baselines. Investors, rating agencies and multilateral lenders recalibrate forecasts. For government planning, more granular sectoral data help target PLI schemes, infrastructure spending and employment policies.
Yet challenges loom: delays in releasing Consumer Expenditure data since 2017, gaps in informal-sector surveys, and reconciling GST turnover with value-added may complicate back-series estimation. MoSPI has signalled iterative consultations with the Advisory Committee on National Accounts and external economists to ensure transparency and credibility.
Significance to the UPSC Exam
- GS III – Indian Economy: Illustrates data‐governance reforms, national-accounts methodology and fiscal-ratio implications.
- GS II – Governance: Highlights institutional evolution from Mahalanobis committee to NSO, reflecting evidence-based policymaking.
- Essay & Interview: Offers contemporary example of how statistical revisions shape economic narrative, investor confidence and Centre–State fiscal dynamics.
Knowledge of base-year mechanics equips aspirants to critically interpret growth numbers and policy debates—an essential competency for both Prelims and Mains.
