India to Revise GDP Base Year to 2011-12
New Delhi, June, 20: The National Statistical Commission (NSC), has suggested to revise the base year to 2011-12 from the current base year of 2004 -05
for the calculation of new gross domestic product (GDP) of the country.
According to NSC, close base year will lead to accurate reading of economic structure of the country.
"We have started preparations for shifting the base of the GDP to 2011-12, as per the recommendations of the National Statistical Commission (NSC)," said TCA Anant, Chief Statistician of India.
Presently, three most awaited economic indicator, the Gross Domestic Product (GDP) , the Index of Industrial Production (IIP) and Wholesale Price Index (WPI) are based on 2004-05 prices.
The base year for GDP has been revised after every five year for improving accuracy in data. Earlier, NSC has suggested 2009-10 as the new base year but has dropped the idea due to year was named abnormal year. As the country was recovering from the global financial crisis that year could not be considered for base year.
According to NSC, in 2011-12, the five-yearly survey on employment and consumer expenditure will be repeated. They were carried out in 2009-10, but since bad monsoons would have affected employment and income growth, the surveys will need to be done again.
The change in the base year of the GDP series is considered to be very important, as the other two major data series, IIP and WPI, are also expected to be changed to the same base year.
Now, economist of country has started the conscious discussion on the effect of change in base year on key economic indicator. Economists say current higher inflation rate could mean lower inflation rate in coming year. Similarly present slowdown in growth rate of 8.5 % could mean higher growth in future.
According to Analysts, till now, 2011-12 is a choppy year due to higher inflation and lower economic growth, but the officials of NSC has been considering it as normal year. Real picture would be clear when the final figure will come. Till that all the reports will be speculation.
Ultimately Govt and its officials has succeed to find the way to curb whopping inflation in country and may provide some statistical relief to common man.