A big step is being taken to bring new freshness to India’s economy. The government has announced that the base year of GDP (gross domestic product) will be updated in 2022-23. This change will come into effect by February 2026. Why is this necessary? And what impact will it have on us? Let’s understand in depth.
GDP base year: What is its importance?
Understanding the GDP base year is not rocket science. If we understand it in simple language, then it is the base year against which we measure the economic progress of the country.
Why is it necessary to change the base year of GDP?
Over time, people’s spending habits, the nature of industries and the structure of the market change. To reflect these changes, it is necessary to update the GDP base year regularly.
- Adding new sectors: like e-commerce, digital services.
- Consumption pattern: People’s priorities change.
- Economic structure: Shift between small and large industries.
2022-23: Why was the new base year chosen?
The government has decided to choose 2022-23 as the new base year. There are some solid reasons behind choosing this year:
- Post pandemic recovery: The economy started showing stability this year.
- Digital revolution: Rapid expansion of UPI and other digital platforms.
- Global impact: Impact of new policies.
Role of ACNAS: The helmsman of GDP update
ACNAS (Advisory Committee on National Accounts Statistics) has been entrusted with this important task. This 26-member committee is working under the chairmanship of Biswanath Goldar.
What is the work of ACNAS?
- Data collection and analysis.
- Inclusion of new sectors.
- Preparation of accurate economic indicators.
February 2026: Deadline for change
ACNAS has set a target to complete this work by 2026. This process will be done in a phased manner so that no important aspect is missed.
MoSPI’s new steps: Focus on data
MoSPI (Ministry of Statistics and Programme Implementation) Secretary Saurabh Garg made some other announcements along with the GDP update.
Monthly data of PLFS
Monthly data of Periodic Labor Force Survey (PLFS) will be released from January 2025. This will help in better understanding the employment situation.
Process of economic census
The process has also been expedited for the start of the economic census.
Data driven decisions: The key to the future
Saurabh Garg emphasized how important data driven decision making is in today’s time.
Focus on data governance
Work is being done on common guidelines to improve data governance.
- Data accuracy.
- Data management.
- Improvement in survey process.
Challenges and solutions
In some areas, the survey team has to face lack of cooperation from the people. For this, awareness has to be increased.
What will be the impact of change in GDP base year?
This change is not just a game of numbers, but it will show the reality of our economy in a better way.
Key impacts:
- Accurate picture of the economy.
- Improvement in policy decisions.
- Close to international standards.
India in the international perspective
With the improvement in the economy and efforts of data governance, India will be in a strong position globally.
Is this change enough?
This is a big step, but it needs constant updates and improvements.
Next step for GDP update
The government has clarified that discussions are going on with all stakeholders regarding this change. It will be finalized only after the recommendations of ACNAS are implemented.
Conclusion: Why is this change important?
The change in GDP base year is an attempt to clean up the picture of our economy. This will not only help in measuring the development of the country better but will also make policy decisions stronger.
FAQs: Frequently Asked Questions
1. What does it mean to change the GDP base year?
It indicates changing the base year against which economic data is measured.
2. Why was 2022-23 chosen?
It represents post-pandemic stability and the digital revolution.
3. What is the role of ACNAS?
ACNAS provides data collection, analysis and recommendations for GDP updates.
4. How will this benefit the common people?
This change will help in accurate economic policy making, which will benefit every section.
5. Is this change regular?
Yes, it is updated once every decade so that the changes in the economy can be measured accurately.