Calibrating Afresh
(Source: The Indian Express, Editorial Page)
Also Read: The Indian Express Editorial Analysis: 10 June 2025
Also Read: The Hindu Editorial Analysis: 10 June 2025
Topic: GS Paper 3: Growth and Development, Indian Economy, Transparency in Governance |
Context |
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Background:
- India’s last GDP base year revision was in 2015 (to 2011–12), while CPI was last updated in 2012.
- Since then, the economy has undergone structural shifts like GST, demonetisation, and digitisation. However, current data sources don’t fully incorporate newer sectors or informal transactions captured through GST/e-way bills.
- Past revisions faced criticism for lack of transparency, especially after the GDP growth rate appeared inflated post-base revision.
- The MoSPI (Ministry of Statistics and Programme Implementation) now faces the dual challenge of improving data robustness and winning public trust.
Why Revision Is Needed:
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Economic indicators must reflect current consumption and production patterns.
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GDP and CPI influence fiscal planning, welfare targeting, and inflation control.
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New data sources (GST, digital economy) need integration for accuracy.
Concerns With Current Series:
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The 2011–12 GDP base year overlooks post-2017 GST impact.
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CPI weights from 2012 are outdated amid changing household spending.
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Omission of gig economy, startups, and e-commerce causes data lag.
Importance of Transparency:
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Past controversies (like withheld NSSO reports) damaged institutional trust.
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Clear publication of methodologies fosters accountability and academic scrutiny.
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Investors, credit rating agencies, and economists rely on credible data.
Statistical Reforms and Global Practice:
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Countries like the UK revise GDP base every five years.
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International standards (like SNA 2008) call for open data governance.
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Independent audits improve perception and reliability of national data.
Way Forward:
- India should regularise updates to economic indicators every five years and institutionalise independent audits.
- Greater openness in data methodology will enhance democratic accountability and global investor confidence.
Comparison of Current vs Proposed Data Updates:
Indicator | Current Base Year | Issues with Current Base | Proposed Improvement |
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GDP | 2011–12 | Excludes GST & digital economy data | Include GST, e-way bills, updated sectors |
CPI | 2012 | Outdated weightage; poor rural representation | Reflect new consumption patterns post-pandemic |
Statistical Process | Opaque & irregular | Delayed disclosures and lack of public review | Transparent, audited, periodic revisions |
Practice Question: Why is it important to periodically revise base years for GDP and CPI in India? What are the risks associated with data opacity in official statistics? (15 marks, 250 words) |