Why India Changed GDP Base Year to 2022-23: Exam Guide

What is a “Base Year” & Why It Matters?
Definition: A reference year (assigned value=100) against which economic growth is measured.
Current Use:
GDP: 2011-12
IIP (Industrial Production): 2011-12
CPI (Retail Inflation): 2012

Why Revise?:
Outdated consumption patterns (e.g., smartphones barely existed in 2011-12).
New sectors (gig economy, startups) need representation.
Aligns with global standards (e.g., US revises every 5 years).

Key Reasons for the 2022-23 Revision
Data Modernization: Incorporate post-COVID economic structure and digital transactions.
Survey Integration: Use updated datasets like:
Consumer Expenditure Survey (CES)
Periodic Labour Force Survey (PLFS)
Accuracy Boost: Correct distortions (e.g., overestimated manufacturing growth under old series).

How Base Years Are Chosen
Stability: A “normal” year without major disruptions (e.g., avoiding 2020-21 due to COVID).
Data Availability: Requires comprehensive surveys (delayed in 2017 due to poor CES results).
Global Alignment: Follows UN’s System of National Accounts guidelines.

Historical Timeline of GDP Base Years in India
1948-49 → First series (National Income Committee)
1960-61, 1970-71, 1980-81 → Updated every ~10 years
1993-94 → Aligned with IMF standards
2011-12 → Current series (launched 2015)
2022-23 → New series (releases Feb 27, 2026)

Why Aspirants Should Care
Prelims: Direct questions on base years (e.g., “Current GDP base year?”).
Mains (GS-III): Analyze policy impacts – e.g., how revised GDP affects fiscal deficit targets.
Interview: Discuss controversies (e.g., 2015 revision allegedly boosted growth rates).
 

Sample Q&A for Competitive Exams
Q: What is the new base year for India’s GDP calculation?
A: 2022-23 (replacing 2011-12).
Q: Which committee compiled India’s first GDP estimates?
A: National Income Committee (1949), chaired by P.C. Mahalanobis.
Q: Why was the 2017 plan to revise the base year delayed?
A: Delayed due to incomplete Consumer Expenditure Survey (CES) data.
Q: How does a base year revision impact economic growth rates?
A: It can raise/lower growth figures by changing sectoral weights and price references.
Q: Which exam syllabus covers GDP base year revisions?
A: UPSC Prelims (Economy) and Mains GS-III (Economic Development).