Relevance: GS III (Indian Economy) | Source: The Hindu
1. What is the Big News?
On February 27, 2026, the Indian government is launching a new series for calculating our GDP (Gross Domestic Product).
- The Big Change: We are shifting the “benchmark” or Base Year from the old 2011-12 to the modern 2022-23.
- Why now?
- Our economy has changed completely in 10 years.
- We have more online businesses, a new tax system (GST), and thousands of startups that didn’t exist in 2011. Using 2011 data today is like trying to find your way in a new city using a 15-year-old map.
2. What is Changing?
The government is making four important “smart” changes to make the data more accurate:
- New Base Year (2022-23): This year will be used to compare all future growth. It reflects today’s prices and today’s shopping habits, making the data more realistic.
- Using Actual GST Data: Instead of making “guesses” about how much companies are producing, the government will now use actual records from the Goods and Services Tax (GST) system.
- Including Small Businesses: For a long time, small “unorganised” shops (like local kirana stores or small workshops) were hard to track. The new series uses better surveys to count their contribution accurately.
- Activity-Wise Tracking: The new system is more detailed. It doesn’t just look at a company as a whole; it tracks specific business activities (like manufacturing vs. services) to see exactly which part of the economy is growing.
3. Why is this Better for India?
- Targeted Help: If the government knows exactly which sector is struggling (e.g., small-scale textiles), it can create better policies and send financial help (subsidies) to the right people.
- Investor Trust: When our data is modern and transparent, foreign investors feel more confident about putting their money into Indian businesses.
- Capturing the ‘Digital’ World: The new system finally accounts for the “Gig Economy” (like delivery partners and app-based services) which is a huge part of modern India.
4. Quick Summary
| Feature | Old Series | New Series |
| Base Year | 2011-12 | 2022-23 |
| Main Data Source | Old surveys & estimates | Real-time GST & actual records |
| Panchayat/Local Bodies | Guessed from old trends | Directly estimated every year |
| Informal Sector | Rough estimates | Tracked using actual modern surveys |
UPSC Value Box
| Important Term | Simple Meaning for UPSC |
| GVA (Gross Value Added) | It shows the “pure” value a sector (like Agriculture) adds to the economy. GVA = GDP – Taxes + Subsidies. |
| MoSPI | The Ministry of Statistics and Programme Implementation. This is the main government office that calculates and releases India’s GDP numbers. |
| Base Year | A “normal” year used as a benchmark to measure growth while ignoring the confusion caused by rising prices (inflation). |
With reference to the new National Accounts (GDP) series in India, consider the following statements:
- The Ministry of Statistics (MoSPI) has officially shifted the base year for GDP calculation from 2011-12 to 2022-23.
- The new series utilizes actual Goods and Services Tax (GST) data to provide more accurate regional and sector-specific output.
- Gross Value Added (GVA) at basic prices is calculated by adding production taxes and subtracting production subsidies from the GDP.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Correct Answer: (a)
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