Govt to roll out new base-year series for inflation, GDP in Feb
GDP calculation: The central government will calculate inflation and gross domestic product (GDP) using a new methodology from February next year. The new data for the Index of Industrial Production (IIP) will be released from May next year. 2022-23 will be taken as the base year for GDP and IIP. 2024 will be taken as the base year for retail inflation.
Currently, the Union Ministry of Statistics and Programme Implementation is calculating GDP and inflation using 2011-12 as the base year. While most countries in the world use five years of historical data for this, India is taking 14 years of historical data into consideration.
The purpose of changing the accounting method is to move forward in line with the current global trends. According to the information, the new series will release inflation data on February 12, 2026, GDP data on February 27, and IIP data on May 28. For a long time, the old base year was used to calculate GDP.
Experts were demanding its change. The data to come in the coming days will present a more realistic picture of the economy. Currently, the impact of food and beverages on retail inflation is high in the accounting method. Their impact will be reduced in the new series. The government believes that with increasing income, people are spending less on food and more on education, health, and entertainment. The new series will reflect modern lifestyles.
The new IIP series will take into account the products produced within a year. Old products will be removed from the list. Products that are not in demand in the market will also not be included. A few days ago, Statistics Ministry Secretary Saurav Garg informed that the process of improving the data is going on. There is a problem in formulating policies due to old data. After adopting the new base year, it will also be easier for the Reserve Bank to take interest rate decisions. Because they will have more accurate data on inflation.
