Revamping Economic Indicators: A New Era for India's CPI, GDP, and IIP

The Statistics Ministry's decision to revise the base year for CPI, GDP, and IIP aims to better reflect current consumption patterns and economic structures, enhancing policy-making capabilities. This overhaul includes changes in methods and data sources, tackling the evolving economy, and supporting more precise monetary policies according to RBI Governor Sanjay Malhotra.

The Statistics Ministry of India has announced a significant revision of the base year for key economic indicators including the Consumer Price Index (CPI), Gross Domestic Product (GDP), and Index of Industrial Production (IIP). This move, welcomed by Reserve Bank Governor Sanjay Malhotra, aims to better align with current consumption trends and economic structures.

Malhotra emphasized the importance of these indicators, particularly CPI, in policy-making for the Reserve Bank of India, noting that the revision is not limited to the base year but includes updates to methods, weights, data sources, and computation techniques. He stated that these enhancements are crucial for sustaining price stability and fostering economic growth.

Set to take effect in early 2024, these changes will reflect the modern composition of the Indian economy, particularly the growing influence of services and digital activities. The initiative will see the release of a new CPI series in February, a revamp that aims to strengthen statistical systems and refine policy calibration.

(With inputs from agencies.)