India prepares to release a revamped gross domestic product (GDP) series with 2022-23 as the new base year on Friday. This marks the eighth major revision in the history of the country’s National Income Accounts.
Economists anticipate the 2022-23 series could revise FY26 growth higher, potentially accelerating India’s trajectory toward milestones like a $5 trillion economy. As per the first advance estimates released in January, FY26 real GDP growth is estimated at 7.4%.
0.3% Factor
Madan Sabnavis, Chief Economist at Bank of Baroda, said that it has been seen in the past that whenever the GDP series is revised, there’s a tendency for the GDP growth rates to move upwards. He said the reason for that is a more contemporary basket of goods and services being included, and many outdated items are removed.
“There’s also better information capture. That’s why there’s a tendency for the numbers to come out higher,” he said. “Will it be significantly higher than before? Unlikely. The difference won’t be more than 0.2–0.3 percentage points.”
Vivek Kumar, Economist at QuantEco, however, said the base year revisions will not have any fundamental impact on the growth rate.
According to Gaura Sen Gupta, Chief Economist at IDFC First Bank, the last base year (2011-12) revision resulted in an average 0.8 percentage point upward adjustment in real GDP growth from FY06 to FY14. She highlighted that the change in methodology involved greater utilisation of the Ministry of Corporate Affairs (MCA) database of company results in the manufacturing sector to estimate value added.
From 1948 to 2026
The practice of revising the base year dates back to the early years of independent India. The first official national income estimates were released in 1956 using 1948-49 as the reference period to capture the immediate post-independence agrarian and industrial economy. The first revision exercise was conducted in 1967, shifting the base year to 1960-61. This incorporated data from post-independence censuses, livestock surveys, and early economic studies to better reflect recovery and planning-era developments. Subsequent revisions have aligned the accounts with evolving economic realities, incorporating new surveys, censuses, and international standards while addressing outdated price baskets and sectoral weights.
The last revision, also the seventh, in January 2015 shifted the base year to 2011-12. The revision introduced major changes, switching from GDP at factor cost to GDP at market prices (via Gross Value Added at basic prices), expanded coverage of the corporate sector and local bodies, and alignment with System of National Accounts 2008 standards. This revision significantly altered growth perceptions and sparked debates over methodology.
The current shift to 2022-23, selected as the most recent “normal” year post-COVID disruptions, will be released along with back-series data and Second Advance Estimates for FY26. It draws on modern sources like GST filings, MCA data, the Household Consumption Expenditure Survey (HCES), Annual Survey of Unincorporated Sector Enterprises (ASUSE), Periodic Labour Force Survey (PLFS), and other high-frequency datasets. Key enhancements include more granular price deflation, using about 600 items to deflate output, up from 180 in earlier series, refined double deflation in sectors like manufacturing, and improved capture of the digital economy, e-commerce, renewables, formalization effects, and shifts in consumption and investment patterns.