Understanding the new GDP series: What changes with the FY23 base reset. Key details

The government has rolled out a revised series of Gross Domestic Product (GDP) with 2022-23 as the new base year, marking a significant upgrade in how the economy is measured. The reset is more than a statistical exercise — it reshapes how growth, sectoral contributions and real output are captured.  

Here’s a closer look at what changes, why it matters and what to expect.  

What is GDP and how is it different from GVA?  

Gross Value Added (GVA) measures the value of goods and services produced in the economy after subtracting input costs. GDP is derived by adding taxes on products and subtracting subsidies from total GVA.  

Revising the base year ensures that both GVA and GDP reflect current production patterns, price structures and data sources, making comparisons over time more meaningful.  

Why is 2022-23 the new base year?  

A base year must be a “normal” year without major economic disruptions. The government has identified 2022-23 as such a year, backed by the availability of critical survey data. The revision aligns with the practice of updating the base roughly every five years to reflect structural changes in the economy.  

What is the back series and when will it be released?  

When the base year changes, past GDP data are recalculated using the new methodology to maintain comparability. This recalculated historical data is known as the back series.  

Annual and quarterly estimates under the new base for 2022-23 to 2025-26 is released on February 27, 2026. The back series is expected by December 2026.  

What are the key methodological upgrades?  

1. Stronger measurement of the household sector  

Earlier, informal and unincorporated enterprises were estimated using benchmark surveys and growth proxies. The new series will rely on annual surveys such as the Annual Survey of Unincorporated Sector Enterprises (ASUSE) and the Periodic Labour Force Survey (PLFS), allowing direct yearly estimates. This is expected to better capture the dynamism of the informal economy.  

2. Double deflation in manufacturing  

To measure real growth more accurately, the new series eliminates single deflation in manufacturing. Instead, it adopts double deflation — adjusting outputs and inputs separately for price changes. Over 300 item-level price indices will be used to refine estimates.  

3. Use of Supply and Use Tables  

GDP can be calculated through production and expenditure approaches, and the two do not always perfectly match, creating a statistical discrepancy. The new series deploys Supply and Use Tables (SUT) to reconcile production and spending data, reducing mismatches and improving consistency.  

4. Updated rates, ratios and corporate classification  

Estimation ratios have been refreshed using recent expert studies. Multi-activity private corporations will now have their output split across activities more precisely, instead of being classified under a single dominant activity.  

5. Expanded data sources  

The new framework integrates GST data for allocation and validation, e-Vahan data for estimating private consumption in road transport, and Public Finance Management System (PFMS) data for improved government expenditure measurement. Sector-specific studies in agriculture, fisheries, dairy and transport services have also been incorporated.  

How does the new series handle inflation better?  

A GDP deflator removes price effects to measure real growth. The revised series applies deflators at a more granular level and introduces double deflation in key sectors. While the current Wholesale Price Index (WPI) continues to be used until updated, its application has changed to item-level deflation. The Producer Price Index (PPI) will be incorporated once officially released.  

What changes in quarterly GDP?  

Quarterly estimates will align more closely with annual national accounts in terms of sectoral classification and deflation practices. High-frequency indicators such as GST collections will be used more extensively. Improved benchmarking methods are expected to enhance stability and reduce volatility in quarterly numbers.  

What about states?  

Once the national base year is updated, states and Union Territories will align their Gross State Domestic Product (GSDP) series with the new base. This ensures methodological consistency across national and state accounts.  

Why does this matter to citizens?  

GDP is not just a headline number. It shapes policy direction, investment decisions and credit availability. Better measurement of informal activity, digital services, agriculture diversification and manufacturing output allows policymakers to design more targeted interventions.