Relevance: GS III (Economy – Growth & Planning) | Source: PIB

1. The Context: Reflecting a “New India”

The Ministry of Statistics and Programme Implementation (MoSPI) is undertaking a massive rebasing exercise in 2026.

• The Problem: Current indices (like GDP and CPI) rely on old “Base Years” (2011-12 or 2012). They fail to capture the massive structural shifts of the last decade, such as GST, the digital payment revolution, and changing consumption habits.
• The Solution: New base years are being adopted to ensure economic data reflects the post-pandemic reality.

2. The “Big Three” Revisions

MoSPI is updating the benchmarks for the three critical indicators of the economy:

1. Consumer Price Index (CPI):
   • New Base Year: 2024 (shifted from 2012).
   • Logic: Based on the Household Consumption Expenditure Survey (HCES) 2023-24. It acknowledges that Indians now spend more on services/durables and less on basic cereals than they did in 2012.
2. Gross Domestic Product (GDP):
   • New Base Year: 2022-23 (shifted from 2011-12).
   • Why 2022-23? It is considered the first “normal” year after the disruptions of the COVID-19 pandemic.
   • New Data: It integrates real-time administrative data (like GST and e-Vahan) instead of relying solely on old survey methods.
3. Index of Industrial Production (IIP):
   • New Base Year: 2022-23 (shifted from 2011-12).
   • Goal: To align industrial volume data with the new GDP series and capture new sectors like renewable energy manufacturing.

3. Capturing the “Invisible” Economy

A major flaw in previous statistics was the poor coverage of the informal sector.

• ASUSE & QBUSE: The Annual Survey of Unincorporated Sector Enterprises has been revamped. Additionally, Quarterly Bulletins (QBUSE) now provide faster data on informal businesses, removing the year-long wait for reports.
• Digital Push: Surveys are now conducted using CAPI (Computer Assisted Personal Interviewing) with AI validation, slashing release times from months to days.

UPSC Value Box

Q. With reference to the measurement of the Indian economy, the term “Base Year” refers to:

1. The year in which the fiscal deficit was zero.
2. A benchmark year used as a reference point to compare economic indicators like GDP and inflation over time.
3. The year when the country’s exports exceeded its imports for the first time.
4. The financial year immediately preceding the implementation of the GST regime.