GDP base year reset: India has switched its national accounts to a new GDP series with 2022-23 as the base year, and has released the first quarterly print under the new series for Q3 FY2025-26.
The immediate risk is interpretive, not arithmetic. A base-year revision improves measurement, but it also breaks familiar signposts. For a few quarters, analysts will have to separate real shifts in output from changes in method, data sources, and deflators.
READ | GDP growth slowdown: Base effect or deeper signal?
GDP base year 2022-23: Why this year, why now
A base year is the reference year used to express “real” GDP after removing price effects. MoSPI’s National Statistical Office (NSO) says it aims, under normal conditions, to revise base years roughly every five years.
NSO has chosen 2022-23 because it is treated as a “normal” year relative to the disruption window that included GST consolidation and the pandemic, and because key survey inputs needed for national income estimation are available for that year.
Better deflators, more administrative data
The headline change is not the date on the base year. It is the measurement architecture.
Double deflation becomes the default
NSO is expanding the use of double deflation, removing price effects separately for outputs and inputs, especially for manufacturing (and not just agriculture). It also indicates greater granularity in deflators, using hundreds of item-level indices, and doing away with the older reliance on single deflation in the new setup.
This matters because many sectors face divergent input and output price movements. If you deflate only the top line, you can misread volumes when margins are moving.
READ | New GDP series: What will change, and why it matters
Supply-Use Tables to reduce statistical discrepancy
NSO flags stronger use of Supply and Use Tables to reconcile production-side and expenditure-side estimates and minimise the residual that shows up as “statistical discrepancy”.
Administrative datasets move from signals to inputs
NSO’s FAQ is explicit about incorporating administrative and digital exhaust more systematically: GST data, PFMS, and e-Vahan are cited as sources used for compilation/corroboration and for specific components such as PFCE linked to road transport services.
Surveys do not disappear. But the new series leans harder on frequent, structured records to tighten quarterly estimation.
Back series: When comparability returns
A new series without a back series is a measurement break. NSO says annual and quarterly estimates under the 2022-23 base for 2022-23 to 2025-26 are being released now, and that the back series is expected by December 2026.
Until that arrives, comparisons with older trend lines should be made with caution. The economy does not “change” on revision day. The measuring tape does.
READ | India’s GDP growth masks a shift towards debt dependence
Will India’s growth rate look different
It can. A revision changes weights, coverage, and deflators. Even if underlying activity is unchanged, the measured growth path can shift.
On the day of release, MoSPI reported 7.8% real GDP growth in Q3 FY2025-26 under the new series, alongside a 7.6% real GDP growth estimate for FY2025-26 in its annual numbers.
Treat the first prints as a new baseline, not as a verdict on the old one.
High-frequency indicators and nowcasting
The more official GDP leans on administrative datasets, the more analysts must understand the operational quirks of those datasets.
If GST filings are used more intensively, then compliance shifts, filing deadline effects, and classification issues can matter more for short-term movements. NSO frames GST as a cross-validation and quarterisation input in quarterly national accounts.
Nowcasting models that learned stable relationships between electricity demand, freight, vehicle sales, and old-series industrial GVA may need re-estimation once revised quarterly histories are available.
Early revisions will happen: That is the system working
NSO’s own framing implies two realities: richer near-real-time data can reduce long-run error, but early estimates will still evolve as late returns, reconciliations, and better sectoral splits come in.
The right test is not whether revisions occur, but whether they become smaller and more predictable over time.
Inflation measurement: more credibility in the deflator, fewer arguments about the wedge
The revision’s core promise is more granular and more appropriate deflation, including wider use of item-level indices and double deflation.
That does not end debates about inflation. It narrows the room for disputes driven by mismatched deflators and poor price mapping from outputs to inputs.
What it means for RBI and North Block
For the RBI and the finance ministry, the early quarters of the new series will be a period of disciplined reading. The improvement is in sectoral clarity and in the ability to cross-check activity using administrative records.
But policy should not chase statistical discontinuities. The first job is to learn the new series’ behaviour, then decide whether it is revealing a new growth mix or simply measuring the old mix more cleanly.