Previous revisions also caused changes in nominal GDP: Analysis

The base year change from 1999-00 to 2004-05 led to a 6% rise in nominal GDP numbers of Q1FY08

While the downward revision in the nominal gross domestic product (GDP) numbers for the first quarter of 2025-26 (Q1FY26) in the new series (base year 2022-23) has triggered a debate, a Business Standard analysis shows that such changes have occurred in the past too.

 

Theoretically, GDP at current prices should not change when the base year changes, since the revision should reflect only at constant prices. However, there are revisions because of methodological changes and improved coverage. 

 

For instance, in Q1FY08, there was an increase of nearly Rs 64,000 crore, or 6 per cent, in GDP at current prices in the new series with a base year of 2004-05, compared with the old 1999-00 series.

 

Surprisingly, there were relatively smaller changes in GDP at current prices when the series changed from 2004-05 to 2011-12, despite an overhaul of the methodology used for computing GDP, when gross value addition at basic prices was used for the first time. 

 

In earlier series, GDP at factor cost used to be considered for calculating GDP growth at constant prices. That gave way to GDP at market prices. Before the 2011-12 series, GDP at market prices was used for computing GDP at current prices. The change resulted in a huge variation of GDP at constant prices between the quarterly data of the 2011-12 and 2004-05 series.