A statistical reset that strengthens GDP credibility under new series

The Ministry of Statistics and Programme Implementation (MoSPI) has completed the revision of India’s national accounts with a new base year of 2022–23. While base revisions are a routine statistical exercise, both the substance and the speed of this revision make it noteworthy. Completed in about 18 months—far quicker than the usual three years—the exercise restores timeliness to India’s macroeconomic measurement system after pandemic-related disruptions.

 

Real GDP is now estimated to grow by 7.6 per cent in FY 2025–26, while nominal GDP is estimated to rise by 8.6 per cent. These figures represent upward revisions from the First Advance Estimates prepared using the earlier 2011–12 base. Nominal GDP at current prices is estimated at ₹345.47 lakh crore in 2025–26, up from ₹318.07 lakh crore in 2024–25. More than the revised growth numbers, however, it is the methodological strengthening and improved data sources that lend greater credibility to India’s GDP estimates at a time of heightened domestic and international scrutiny.

 

Having been associated with the previous base revision in 2015, when the base year shifted to 2011–12, the current exercise builds on that framework while addressing several of its limitations. The process benefited from guidance by the Advisory Committee on National Accounts Statistics, comprising academic and national accounts experts, ensuring both technical depth and institutional continuity. Consultations held in Mumbai, Delhi and Chennai further made the exercise participatory for a wide range of experts and data users.

 

Base revisions are not cosmetic. As economies evolve, production structures, sectoral weights and consumption patterns change, making older base years progressively less representative. International best practice recommends rebasing every five years; India could manage this time after more than a decade. The delay in the present cycle was understandable given COVID-19’s disruption to surveys and data collection, which makes the timely completion of this revision especially significant.

 

Four changes in the revised series stand out.

 

First, the strengthened treatment of the corporate sector. The use of Ministry of Corporate Affairs (MCA) data, introduced in the 2011–12 series and initially controversial, has since become indispensable. Its continued use—now augmented by MGT-7 and 7A filings—allows for more accurate industry-wise allocation of value added, particularly for multi-activity firms. Improved identification of firms’ principal economic activities reduces classification errors that previously affected estimates of manufacturing and services value added.

 

Second, there is a marked improvement in measuring the unincorporated sector, which accounts for roughly a quarter of Gross Value Added but nearly three-quarters of total employment. Earlier estimates relied heavily on organised-sector proxies, which failed to capture the sector’s volatility and structural change. Regular data from the Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE) now allow for more direct and frequent estimation. This represents a major advance, especially for employment-intensive segments central to policy design.

 

Third, the move towards double deflation in estimating real growth addresses a long-standing methodological concern. India’s earlier reliance on single deflation for most manufacturing and services sectors had drawn criticism from the IMF and other international agencies. By deflating both outputs and inputs separately, double deflation provides a more accurate measure of real value added. While further progress will depend on the development of Producer Price Indices for inputs and outputs, the shift in principle marks a significant improvement.

 

Fourth, MoSPI has committed to compiling balanced Supply–Use Tables alongside final GDP estimates. Reconciling production, expenditure and income approaches is essential for internal consistency. Although this was contemplated during the 2011–12 revision, limited experience delayed its implementation. With over a decade of work on Supply–Use Tables now behind it, this reform has been institutionalised, helping address persistent scepticism about divergences between production- and expenditure-side GDP estimates.

 

Household consumption measurement has also been substantially improved. Private Final Consumption Expenditure was earlier derived largely through commodity-flow methods. Integration of Supply–Use Tables with data from the Annual Survey of Industries, ASUSE and GST records has yielded more realistic consumption estimates—an important advance given the central role of consumption in India’s growth narrative.

 

Overall, the 2022–23 base revision represents a substantive statistical reset. By addressing long-standing methodological gaps and improving data quality, it strengthens the credibility of India’s GDP estimates and reinforces confidence in the country’s macroeconomic statistics.

 

Former Director General, MoSPI, GoI; Former Director, UN Statistical Institute for Asia and the Pacific, Japan; and President, Centre for Data on Economic Decision-making & Chief Statistician, Pahle India Foundation

 

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