The government may use different base years for calculating Gross Domestic Product (GDP) and retail inflation (measured through the Consumer Price Index), government sources told The New Indian Express (TNIE). According to the sources, the base year for GDP will likely be 2022–23, while that for CPI will be 2023–24. Currently, both GDP and CPI calculations are based on the 2011–12 base year.
“2022–23 is a natural choice for the GDP base year, as the Annual Survey of Industries (ASI), the Annual Survey of Unincorporated Sector Enterprises (ASUSE), and the Household Consumption Survey were conducted during that year,” said a government source, who declined to be named.
The official added that the decision to use a different base year (2023–24) for CPI was made because the price collection survey only started in January 2024. Justifying the use of different base years, the official said both GDP and CPI are independent statistical indicators, and it is not unusual for their base years to differ.
“The structure of the economy does not change much in one year,” the official noted.
According to sources, the weightage of food in the new CPI basket is expected to decline, as household consumption surveys from both 2022–23 and 2023–24 showed a reduced share of food in monthly household expenditure compared to 2011–12.
As per the 2023–24 Monthly Household Consumption Survey, the food expenditure share has fallen from 52.90% in 2011–12 to 47% in rural areas, and from 46.62% to 40% in urban areas. The share of cereals and cereal substitutes in overall expenditure is now about 4.99% in rural areas and 3.8% in urban areas. Currently, food accounts for 44.6% of the combined Consumer Price Index, which tracks retail inflation. Cereals alone have a weightage of nearly 10% in the CPI.
The new CPI basket will include a larger number of items—up from the current 300 to 400—whose prices will be tracked. The method of price collection may also change, the official said.
For the Index of Industrial Production (IIP), the government is considering a shift from a fixed-base index to a chain-based index. Unlike fixed-base indices that use a single base year, chain-based indices use the preceding period as the base for each calculation.
The advisory committee on base year revisions is yet to submit its final report. Sources said the report is expected in the coming months, after which dry runs will be conducted for 2–3 months. The new base years are likely to come into effect from 2026–27.