The Indian government is going to change the entire way of measuring the economic progress of the country. New figures of Gross Domestic Product (GDP) will be released on 27th February. The biggest change in this is that now the base year for calculating GDP will be 2022-23 instead of 2011-12. This change is being made to present the real picture of our economy. With this new method, the life of the common man and the growth rate of the country can be estimated more accurately. The old formula did not accurately reflect the changes that came after the pandemic and the rapidly growing digital market. Recently the base year of retail inflation (CPI) has also been changed to 2024. Now GDP figures are being updated on similar lines.
Why did the scale of measuring GDP have to be changed?
According to Saurabh Garg, Secretary, Ministry of Statistics, this amendment was delayed due to the implementation of GST and the Covid pandemic. Additionally, in November 2025, the International Monetary Fund (IMF) had given India a ‘C’ rating, pointing out shortcomings in the methodology of its national accounts data. All these reasons have inspired the government to improve the data system.
Now the government aims to update this base year every five years. The scope of digital services, renewable energy and new types of investments in the economy has increased significantly. The new system will use modern administrative data like household consumption survey, labor force survey and GST. With this, the hard work of workers associated with the informal sector and gig economy will also be clearly visible in the GDP.
How will the manufacturing sector get a new look?
The most important part of this change is the adoption of ‘double deflation’ technique. Through this, the difference between the prices of raw materials and finished products in the construction sector will be measured more closely. In the old system, the discrepancy in data caused by fluctuations between these two will now be removed. This will accurately reveal the actual growth of the manufacturing sector.
Along with this, the contribution of gig workers working on digital platforms will also be prominently recorded in the economy. High-frequency data from vehicle registration, fuel consumption and GST are being used to measure the unorganized sector. Apart from this, a new method called ‘Proportional Denton’ will also be adopted to match the quarterly data with the annual data.
What will be the impact on the common man’s pocket?
Economists believe that after this change, India’s growth rate may appear faster than before. According to DK Srivastava, Chief Policy Advisor, EY India, the weightage of the service sector will increase in the new system. Since the services sector grows faster than agriculture, the average real GDP growth rate may appear higher even if the underlying economy remains the same.
ICRA Chief Economist Aditi Nair says that the new GDP data will reassess the size of the economy and the growth rate of previous quarters. These figures will be very important for the Reserve Bank because on the basis of these, future monetary policies related to interest rates and inflation will be decided. This will have a direct impact on the country’s economic policies and loan rates.