Context:
Government decides to update the GDP base year from 2011-12 to 2022-23.
Recent Developments:
- Ministry of Statistics and Programme Implementation (MoSPI) announced the government’s decision to update the base year for calculating India’s Gross Domestic Product (GDP) from 2011-12 to 2022-23.
- The last revision to the base year was carried out in 2011-12, replacing the earlier reference year of 2004-05.
- To facilitate this, an Advisory Committee on National Accounts Statistics (ACNAS) has been established
- The committee is chaired by Biswanath Goldar, a prominent economist
- It comprises experts from central and state governments, the Reserve Bank of India, academia and research institutions.
- Central Statistics Office publishes NAS annually, which includes GDP estimates from various approaches.
Base Year:
- A reference point used for calculating economic indicators like Gross Domestic Product (GDP).
- Serves as a benchmark to compare economic growth over different periods by eliminating the effects of inflation.
- It thus allows for the separation of real changes from nominal changes.
- Nominal changes are influenced by both quantity and price changes, while real changes focus solely on quantity changes, as price changes are held constant based on the prices observed in the chosen Base Year.
- Need for Base Year Revision –
- Incorporating New Data Sources: Since 2011-12, the availability of high-frequency quality data has improved due to digitization and sectoral developments, enhancing the precision of GDP calculation.
- Accommodating Structural Changes: The new base year will reflect shifts in consumption patterns, sectoral contributions, and the inclusion of emerging sectors observed over the past decade.
- Other Factors: The new base year will also consider post-pandemic economic dynamics and adhere to international standards for global comparability.
Source: ET
Previous Year Question
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
[UPSC Civil Service Exam – 2018 Prelims]
(a) industrial output fails to keep pace with agricultural output.
(b) agricultural output fails to keep pace with industrial output.
(c) poverty and unemployment increase.
(d) imports grow faster than exports.
Answer: (c)
