Change of base year to calculate GDP is done in line with the global exercise to capture economic information accurately, the government said today.
Change of base year to calculate GDP is done in line with the global exercise to capture economic information accurately, the government said today. Base year revision exercises are undertaken as per the internationally accepted practice to capture the changing structure of the economy, Minister of Statistics and Programme Implementation Sadananda Gowda said in Parliament.
“This ensures capturing latest information and hence accurately reflects the current economic situation in the country,” he said in a written reply to the Lok Sabha when asked about reasons for changing the method. The Central Statistics Office, under the ministry, had last updated base year for GDP calculation to 2011-12 from January 2015, replacing the old series base year of 2004-05.
GDP based on old series does not reflect current economic situation correctly, Gowda claimed. The new series is compliant with the latest United Nations guidelines in System of National Accounts-2008.
The new series is a structural breakaway from the old due to availability and incorporation of new information sources. It takes information for the corporate sector and has better estimates of the unorganised sector from 2010-11 National Sample Survey on unincorporated enterprises and data on sales and service taxes, Gowda said.
The government is likely to change base years for the index of industrial production (IIP) and wholesale price index (WPI) by the end of this month to 2011-12 from 2004-05. Change in baseline for IIP and WPI is expected to bring in more accuracy in mapping the level of economic activity and calculating other numbers like national accounts.