There is tremendous anticipation around the upcoming base revision for Indian data sets, especially in light of the ‘C’ rating India’s national accounts statistics received from the International Monetary Fund (IMF), but one must understand the exercise in the context of its massive scale and complexity, says Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation. He says this is far from a routine statistical update. In an interview, he tells BT’s Surabhi why the GDP base revision took so long and plans to ensure faster updates in future. Edited excerpts:
Why did it take so long to undertake the base revision?
The exercise largely depends on the Household Consumption Expenditure Survey (HCES). The National Statistical Office carried out an All-India HCES from July 2017 to June 2018. The results were not released due to data quality issues, a rare occurrence. The ministry referred the matter to a committee of experts, which came out with several recommendations, including refining the methodology and improving the data quality on a concurrent basis. Subsequently, the Covid-19 pandemic disrupted the next survey, which could be taken up only in 2022-23.
Since there has been a substantial change in consumption patterns of households over the years, significant changes in survey schedule, design and methodology were incorporated, and two rounds of HCES were conducted, in 2022-23 and 2023-24. This improved data is crucial for revising the base year of several important statistical products. The revised estimates of GDP and consumer price index (CPI) based on the new base year will be available by early 2026.
The base year revision of the Index of Industrial Production (IIP) is expected to significantly strengthen the quality and relevance of industrial statistics. It will help update the item basket, weights, and sectoral coverage to better reflect the current structure of the industrial sector, including changes in technology, production processes, and the emergence of new industries. It will also allow replacement of obsolete items and inclusion of new products that have gained economic importance, thereby addressing representational gaps in the existing index.
Do you expect the IMF to revise its rating once the base year revision is done?
The IMF has mentioned that it gave a ‘C’ rating because the base year was 2011-12. It has not raised any issue about the quality of the data or the conclusions.
Will there be a fixed period for revision of base years?
Base year is revised periodically to account for the structural changes in the economy. In the case of GDP, unlike previous revisions, we have introduced an element of dynamism in estimating household sector trends as the Periodic Labour Force Survey and Annual Survey of Unincorporated Sector Enterprises are conducted regularly now. Estimates for other institutional sectors are fairly dynamic even in the ongoing series.
The HCES serves as the foundation for updating the CPI base. We plan to conduct it every three years. As per international recommendations for the IIP 2010, the base year for the IIP should be revised at least once every five years.
Will there be any changes in the advance release calendar for GDP as well?
An expert group is looking into this, keeping in view the data changes. We have asked for comments in our discussion paper. Now, we bring out two advance estimates of GDP, followed by three estimates—provisional estimate, first revised estimate and final estimate. We want to understand for whom the estimates are useful. The first advance estimate is a Budget requirement, but we will look at whether the second advance estimate is used and who are its users. Based on the feedback, we will look at the issue.
Like for other data, will you consider faster timelines for GDP estimates?
We have much more real-time data now. The currency of the data will improve. Whether it will impact the timelines of the data will have to be seen once the final datasets are available. The quarterly estimates are currently brought out in 60 days. Our target is 45-60 days, but that will depend on the data sources. But in many cases, we are constrained, as the data comes from company balance sheets, which come with a lag.
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