Revised base year to improve India’s outlook

By Sangeeta Singh
Published Mar 6, 2026

Last week the Indian Government revised the base year for computing annual and quarterly National income and its components. The new series of annual and quarterly National Accounts Estimates has adopted base year 2022–23, replacing the previous series with base year of 2011–12.

Base year revision is undertaken periodically across economies and is typically considered a good practice as the old base year driven series get outdated, besides new developments in the economy need to be factored in. Mostly, a stable year (in terms of economic growth, geo-political climate, external shocks, etc.) is taken as the new base year which remains there as base year for up to about a decade.

The Central Statistical Office of the GoI had last changed the base year from 2004-2005 to 2011-2012 in 2015. It is customary to compile back series estimates on the new base, whenever a new series of National Accounts Statistics (NAS) is introduced with an updated base period.

Why Was 2022–23 Chosen as the New Base Year?

The key features of the new base year include the following:

Rationale: The 2011–12 base year was considered outdated by the Government. It could not, therefore, capture the structural shifts, growth of digital economy, and post-COVID dynamics in India’s economic structure.
Selection of 2022–23: It was considered as a “normal” post-COVID year, by when major disruptions in sectors of the economy due to COVID were settled.
Additional Data Sources: New administrative data sets like Goods and Services Tax (GST) Network and Public Financial Management System (PFMS) came up and were relied upon by the Government besides e-Vahan vehicle registration data and Annual Survey of Unincorporated Sector Enterprises.

The Financial Year 2022-23 thus made it an appropriate benchmark for the new series of Annual and Quarterly National Accounts Estimates.

Methodological Changes in the New GDP Series

The revised series incorporates following changes to capture the changes in the economy within respective years.¹

Revision in Estimation Methodology: Use of double deflation in agriculture and manufacturing sectors.² Use of single extrapolation in remaining sectors. This method separately adjusts both output (crops/livestock) and intermediate inputs (fertilizers/diesel) for price changes in computation of Gross Value Added. Thus making data more depictive and mitigating overstated growth, if any.
Segregation of activities in multi-activity enterprises for better interpretation of data³. This is expected to lead to improvement in the compilation of the private corporate sector.
Incorporation of rates and ratios from recent surveys and studies⁴. These include various surveys, and methodological studies undertaken by MoSPI (Ministry of Statistics & Programme Implementation) in collaboration with various expert institutions. This move is expected to improve estimations.
Extensive use of GST and various new administrative data sources as discussed above.
Proportional benchmarking for Quarterly National Accounts⁵ series has replaced the pro-rata method of benchmarking in previous series thus improving data representation.

Key highlights of the new GDP series based on FY 2022-23⁶

Real GDP estimated to grow by 7.6% in FY 2025-26. FY24-25 growth has been revised upward to 7.1% from 6.5%.
Overall Economic performance in FY 2025-26 is primarily on account of robust real growth observed in the second quarter (8.4%) and the third quarter (7.8%).
The Economy reflected sustained performance, recording real GDP growth rates of 7.2% and 7.1% respectively during FY 2023–24 and FY 2024–25.
The manufacturing sector has been the major driver in contributing to the performance of the economy in consecutive three financial years after rebasing. This sector has attained double digit growth rates in FY 2023-24 and FY 2025-26.
Secondary and tertiary sectors have boosted the performance of the economy by registering above 9.0% growth rate in FY 2025-26.

Conclusion:

The shift in the national accounts base year to 2022-23 has lifted real GDP growth estimates for 2025-26 to 7.6% from 7.4 % earlier under the old series. The revision also raised 2026-27 projections to 7-7.4%. The updated numbers make India an attractive destination for investment. Further, it reaffirms India’s reputation and credibility as the fastest growing major economy reflecting fiscal stability and improved investment outlook. Overall economic performance in 2025-26 is primarily on account of robust real growth observed in the second and third quarters.

In what may otherwise seem like a routine decadal revision India will gain through the structural changes, methodological improvements and newer data sets and benchmarks.

The International Monetary Fund’s (IMF) annual review in October 2025 had given India’s national accounts statistics a grade of ‘C’, the second-lowest grade. Outdated base year, deflators, data computation in the informal sector and census delay were cited as some reasons.

FAQs

What does revising the GDP base year mean?

Revising the GDP base year means updating the reference year used to calculate real GDP and related national income estimates to better reflect current economic structure and prices.

Why has India changed its GDP base year to 2022–23?

India adopted 2022–23 as the new base year because the earlier 2011–12 base had become outdated and could not capture structural shifts, digital economy growth, and post-COVID changes.

How often is the GDP base year revised in India?

The base year is typically revised once in every decade to ensure that national accounts reflect structural changes and updated economic realities.

What is double deflation in GDP estimation?

Double deflation separately adjusts output and intermediate inputs for price changes while calculating Gross Value Added (GVA), making estimates more accurate.

How has the new base year impacted GDP growth estimates?

The shift to the 2022–23 base year has revised real GDP growth for FY 2025–26 upward to 7.6% from 7.4% under the previous series.

Which sectors are driving growth under the revised GDP series?

Manufacturing has emerged as a major growth driver, while secondary and tertiary sectors have also recorded strong performance.

What new data sources are used in the revised National Accounts series?

The revised series incorporates administrative datasets such as GST Network data and Public Financial Management System (PFMS) records.

How does the base year revision affect India’s economic credibility?

The updated methodology and improved data sources enhance transparency, statistical robustness, and investor confidence in India’s growth projections.

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