The Ministry of Statistics and Programme Implementation (MoSPI) has revised the base years of the Gross Domestic Product (GDP) and the Index of Industrial Production (IIP) to 2011-12 and for the Consumer Price Index (CPI) to 2012.For the IIP and CPI, the item baskets were revised to remove items that were no longer relevant and include those that had become relevant since the last base revision. For the National Account estimates, the new seriesis a structural breakaway from the old series, as it includes information sources which have newly become available or are more regular than the earlier ones. Some examples of these are the new information which is now available for the corporate sector, the estimates of the unorganised sector from the 2010-11 National Sample Survey on unincorporated enterprises and the data on sales and service taxes. All these have been used in the new series.
“Normally, when a new series of National Account Statistics (NAS) is introduced with an updated base period, it is customary for the Central Statistical Office (CSO)to undertake a research exercise to link the old series with the new series. For the compilation of a linked series, the standard methodology used by CSO is the splicing method and reworking the estimates as per the current series methodology at the component or detailed item level. CSO in the past has adopted the following guidelines for the compilation of linked series. For the years from the last base (2004-05) to the current base (2011-12), the components are re-estimated by following the same procedure as for the new series of NAS. Thus new data sources and additional coverage of activities introduced in the new series also need to be accounted for in all the previous years in which these activities were in existence in the economy and the datasets were available and reliable for use,” said MoSP.
“For the years prior to previous base year (2004-05), the estimates are prepared by using the splicing technique. Consequently, it implies that there would be no change in the growth rates of aggregates for the same years between the old series and new series. However, additivity of detailed estimates with the aggregates will not be maintained. This is an accepted practice adopted globally as well as in India. The 2011-12 GDP series incorporates data emanating from the Ministry of Corporate Affairs (MCA) and this data source has been evolving over the years. For back casting the series till 2004-05, various alternatives are being worked out under the guidance of the Advisory Committee on National Accounts and the back series will be finalized and released after due consultations with this expert committee,” it adds.
On the Index of Industrial Production (IIP), which revised and the weighting diagram and its item basket now includes new items that are relevant to the present context. In addition, a mechanism for a regular review of the item basket and data sources has also been put in place. Similarly for the Consumer Price Index (CPI), in addition to a revision of the item basket, several methodological improvements have also taken place in line with international practices. For instance, the geometric mean is now being used in place of the arithmetic mean for computing item level indices so that there is less volatility on account of extreme values. The number of dwellings covered under Repeat House Rent Survey has been doubled for better representation of each category of dwelling. Further, the basket of items and their weighting diagram have been prepared using Modified Mixed Reference Period in place of Uniform Reference Period, which are methodological improvements.
Further, The MoSPIis also planning to launch new surveys for better measurement of the economy in sectors that are growing and contribute to measurement of the economy. Some of these surveys include the Annual Survey of Service Sector Enterprises, the Annual Survey of Unincorporated Sector Enterprises (ASUSE), the Time Use Survey (TUS) and the Economic Census.
Importantly, MoSPI has also decided to revise the base year of the macroeconomic indicators and aggregates to 2017-18 and is working with other Ministries and State Governments towards aligning the data systems to achieve this. The Ministry remains committed to improving the availability, reliability and quality of information of its various products for measuring various aspects of the economy to meet the requirements of policy making, informed debate and academic research.