The ministry of statistics and programme implementation (MoSPI) has constituted a 26-member Advisory Committee on National Accounts Statistics (ACNAS) to recommend a new base year for GDP data, according to an official notification.
Chaired by Biswanath Goldar, a former professor at the Institute of Economic Growth, ACNAS will also explore the alignment of GDP with key indices such as the wholesale price index (WPI) for inflation, the consumer price index (CPI) for consumer inflation, and the index of industrial production (IIP) for factory growth.
The committee’s tenure is set for five years or until the completion of the next base year, whichever is later.
Its mandate includes reviewing existing databases, advising on new data sources to improve National Accounts estimates, and providing guidance on the methodology for compiling and presenting statistics for economic analysis.
At present, indices such as the IIP, WPI, and National Income are benchmarked to FY12, with the previous base year being FY05. The CPI, a widely used price benchmark, also uses 2012 as its base year.
The base year serves as a reference point for measuring changes in economic variables and comparing the relative performance of indicators over time, with real GDP growth currently calculated based on FY12 prices.
Economists said regular updates to the base year are essential to keep indices aligned to shifts in consumption patterns, sector weights and the inclusion of new sectors.
They recommended such updates at least once every 10 years for accurate GDP calculation. They suggest that FY23 could be a suitable base year for data revision, noting the absence of significant droughts or structural shocks to the economy during that period. Plans are also underway to revamp economic indices.
Experts indicate that price indices are outdated and the product basket composition needs updating. For example, the CPI still includes items such as horsecart fares, VCD players, and dung cakes in its basket of 299 products and services. The RBI relies on the CPI as a key price gauge for monetary policy management.
