Informist, Friday, May 17, 2024

--Source: Aim to introduce new GDP, IIP, WPI series by 2026

--Source: New GDP, IIP, WPI series likely to have FY23 as base year

--Source: Statistics min holding discussions to revise GDP base year

By Shubham Rana and Sagar Sen

NEW DELHI – The government is aiming to bring in new series for GDP, Index of Industrial Production, and Wholesale Price Index with 2022-23 (Apr-Mar) as the base year within the next two years, an official aware of the matter said. The statistics ministry is already holding internal discussions for the base year revision of national accounts, Informist has learnt.

GDP, IIP, and WPI all currently have 2011-12 as the base year. GDP and IIP are compiled by the National Statistical Office, while the WPI is compiled and released by the Office of the Economic Adviser in the Department for Promotion of Industry and Internal Trade.

"With the release of the Annual Survey of Industries and the household consumption expenditure report, we can speed up the process to revise the base year for national accounts," the official told Informist on the condition of anonymity.

In February, the statistics ministry had released the results of the Annual Survey of Industries for 2020-21 and 2021-22. The ministry also released a factsheet on the findings of the household consumption expenditure survey for 2022-23 (Aug-Jul).

The results of the industries survey showed that the Gross Value Added rose 26.6% in 2021-22 because of a 35% growth in industrial output. The household consumption expenditure survey, on the other hand, showed that the average spending on food items by rural India, as a share of total expenditure, fell to 46.38% in 2022-23 from 52.90% in 2011-12. Average spending on food items by urban India, as a share of total expenditure, also fell to 39.17% in 2022-23 from 42.62% in 2011-12.

The statistics ministry is holding another round of the household consumption expenditure survey, which is generally conducted every five years, to test the robustness of the new methodology and is scheduled to end by July.

"The ministry is also likely to release the results of the Annual Survey of Unincorporated Sector Enterprises after the General Elections, which will aid in the revision of base year for national accounts," the official said.

"The final decision on the revision of base years will be taken by a committee, but the ministry is aiming to update the base years of these data points by 2026," the official said.

The statistics ministry has been facing flak from several quarters, including from the Economic Advisory Council to the prime minister, about the robustness and accuracy of India's statistical system, including surveys undertaken by the National Sample Survey Office.

As such, the ministry has been under the lens of the Prime Minister's Office. The Prime Minister's office has held multiple meetings with the statistics ministry this year, which have also been attended by senior officials from different departments of the government and the Reserve Bank of India, on overhauling the statistical system.

Informist had reported in March that the statistics ministry has been tasked with the job of preparing a roadmap to revamp the statistical system.

The ministry, on its part, has made certain efforts in recent past to ward off criticism. It released a factsheet of the key findings of the household consumption expenditure survey in February, while the full report is yet to be released.

The NSO has also reduced the time taken to release the final estimates of annual GDP to two years from three by making the second revised estimates as the final estimates. Informist has also reported that the NSO is likely to discontinue the second advance estimate of GDP, probably as early as from next year, reducing the number of updates to annual GDP to four, from the current of five. The NSO is scheduled to release the provisional estimate of GDP for 2023-24 on May 31. The second advance estimates had pegged GDP growth for 2023-24 at 7.6%.

The ministry is also likely to bring a new Consumer Price Index series, revising the basket and the base year by the end of 2025, Informist had reported earlier this year citing a statistics ministry official. With the release of the household consumption expenditure survey after 11 years, the government has already started the groundwork for updating the CPI, Informist had reported.

End

Edited by Maheswaran Parameswaran

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