India Unveils 2022–23 Base Year GDP Series to Modernise National Accounts Framework

Why in News ?

The Ministry of Statistics and Programme Implementation (MoSPI) is releasing a new series of National Accounts Statistics (NAS) with 2022–23 as the base year, replacing the earlier 2011–12 base year.

The revised series aims to provide a more accurate, granular, and internationally aligned estimate of Gross Domestic Product (GDP) and Gross Value Added (GVA). The new series is scheduled for release on February 27, 2026, while back-series data (pre-2022–23) will be released later.

Why the New GDP Series Matters ?

1. Reflecting Structural Transformation

Since the last revision (2015), India’s economy has undergone significant changes:

• Expansion of the digital economy and e-commerce
• Formalisation due to GST
• Changes in employment and consumption patterns
• Growth of financial and service sectors

Updating the base year ensures:

• Better measurement of real growth
• Improved sectoral representation
• Reliable macroeconomic policymaking

Key Structural Changes

1. Base Year Revision

Base year updated from 2011–12 to 2022–23, reflecting the current economic structure and enhancing time comparability.

2. Improved Sector-wise Measurement

(a) Private Corporate Sector

• Old Method: Entire company’s GVA assigned to dominant activity.
• New Method: Activity-wise revenue share allocation.

Impact: More accurate sectoral contribution.

(b) General Government Sector

• Inclusion of housing services for government employees.
• Better coverage of autonomous bodies and local governments.

Impact: Improved measurement of government output.

Better Measurement of Household Sector

The household sector—one of India’s largest contributors—will now be estimated using:

• Annual Survey of Unincorporated Sector Enterprises (ASUSE)
• Periodic Labour Force Survey (PLFS)

Earlier estimates relied on extrapolation; now direct annual estimation improves reliability.

Improved Consumption Estimates

Private Final Consumption Expenditure (PFCE) will use:

• Household Consumer Expenditure Surveys
• Production data
• Administrative datasets

Significance: More accurate measurement of domestic demand.

Integration of New Data Sources

GST Integration

Expanded use of Goods and Services Tax (GST) data for:

• Regional output estimation
• Corporate value addition
• Identifying active companies

Impact: Better measurement of formal economy and reduced estimation errors.

Financial Sector Improvements

Banking Sector

Uses the Statistical Table Related to Banks in India (STRBI) published by the Reserve Bank of India.

NBFC Sector

Earlier proxy-based estimates replaced by actual financial data from the Ministry of Corporate Affairs.

Result: Improved GVA estimates for financial services.

Informal Sector and Agriculture

Informal Sector

Enhanced ASUSE usage captures:

• Insurance agents
• Informal enterprises
• Gross Fixed Capital Formation (GFCF)

Significance: Better representation of India’s informal economy.

Agriculture Sector

Updated methodologies based on studies by:

• Central Marine Fisheries Research Institute
• Central Inland Fisheries Research Institute

Impact: Improved livestock, fisheries, and fodder estimation.

Major Methodological Upgrade – Double Deflation

Old System: Single Deflator

Same inflation rate applied to inputs and outputs.

Problem:

• Overestimation when input prices fall slower than output prices.
• Underestimation when input prices rise faster.

New System: Double Deflation

Separate deflators for inputs and outputs.

Benefits:

• More accurate real GVA
• Sector-specific inflation adjustment
• Reduced growth distortion

This marks a major statistical reform in GDP estimation.

Integration with Supply and Use Tables (SUT)

Supply and Use Tables (SUT) will now be integrated into national accounts.

They capture:

• Production
• Imports
• Intermediate consumption
• Final consumption
• Exports

Benefits:

• Reduced statistical discrepancy
• Greater consistency between production and expenditure approaches

International Alignment

India currently follows the 2008 System of National Accounts (SNA 2008) adopted by the United Nations Statistical Commission. A revised framework—SNA 2025—was adopted recently. India plans to shift to SNA 2025 in its next base year revision.

Possible Impact

1. Growth Revisions

GDP figures may be revised upward in some years and downward in others.

Example: In 2015 revision, 2013–14 growth was significantly altered.

2. Policy Implications

• Fiscal deficit ratios
• Debt-to-GDP ratios
• International investor confidence
• Credit ratings

3. International Comparability

Improves India’s credibility and comparability with global standards.

Challenges and Way Forward

1. Statistical Complexity

• Double deflation is data-intensive
• Back-series reconstruction is complex

2. Institutional Issues

• State-level data quality variations
• Informal sector measurement gaps

3. Credibility and Transparency

Past GDP revisions triggered debate. Transparency in methodology is essential.

Way Forward

• Regular base-year revisions (every 5 years)
• Faster release of back-series
• Strengthening State statistical systems
• Greater administrative data integration
• Early adoption of SNA 2025

Significance

The 2022–23 base-year revision marks one of the most significant statistical upgrades in India’s national accounts in over a decade.

If implemented transparently and updated regularly, it will:

• Strengthen evidence-based policymaking
• Improve investor confidence
• Enhance global statistical credibility
• Better capture India’s evolving economic structure