Base revisions are technical exercises, but history shows they can significantly reshape the narrative around India’s growth performance.
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After a prolonged wait, the statistics ministry is slated to release a new gross domestic product (GDP) series on Friday, with 2022-2023 as the base year.
Base revisions are technical exercises, but history shows they can significantly reshape the narrative around India’s growth performance.
Key Points
- New GDP series coming: Statistics ministry will release a new GDP series with 2022-2023 as base year.
- Past growth revised down: Earlier 9%+ growth (FY06–FY08) was later reduced to around 8% in the revised series.
- Methodology changed: GDP calculation shifted from factor cost to market prices, changing growth estimates.
- Better data used: New series included MCA-21 corporate filings, expanding coverage of companies.
- Narrative impact: GDP revisions can reshape how India’s economic performance is viewed, even if actual activity doesn’t change.
Under the 2004-2005 series, India recorded three consecutive years of 9 per cent-plus growth — 9.3 per cent in 2005-2006 (FY06), 9.3 per cent in FY07, and 9.8 per cent in FY08 — all falling under the Manmohan Singh government 1.0.
That three-year run remains unprecedented in India’s economic history.
No other period has seen such sustained near-double-digit expansion.
The momentum culminated in 10.3 per cent growth in FY11 under the Singh government 2.0, marking the second time when India crossed the double-digit mark.
For the first time the country achieved the feat by recording 10.2 per cent growth in FY89 under 1999-2000 series.
FY22’s 9.7 per cent print came closer, which was largely a rebound from the pandemic-induced contraction of FY21.
GDP Base Year 2022-2023: What Changes
But when the 2011-2012 base series was introduced, those headline numbers were revised downward for overlapping years.
The three-year 9 per cent streak was recalibrated to 7.9 per cent, 8.1 per cent, and 7.7 per cent, respectively.
The 10.3 per cent figure for FY11 was scaled back to 8.5 per cent.
While still robust, the image of an economy flirting with double digits was moderated.
India’s 9 per cent Growth Years Under Review
One can point the finger by accusing the statistics office of undermining the growth period of the Singh government, but the new series (2011-12) also lifted the GDP growth on the older base (2004-2005) of policy paralysis years of the same government — FY13 and FY14. The size of the economy was also adjusted.
For FY08, GDP was estimated at Rs 49.9 trillion under the 2004-05 base, compared with Rs 49 trillion under the 2011-2012 series.
By FY14, the old series showed Rs 113.5 trillion while the revised one placed it at Rs 112.3 trillion.
In dollar terms, FY11 GDP was pegged at $1.71 trillion under the 2004-2005 base, and $1.68 trillion under the 2011-2012 series.
GDP Rebasing and Growth Revision Impact
The changes stemmed from a substantial methodological overhaul.
The 2004-05 series calculated GDP growth at factor cost by summing sectoral output. The 2011-12 series shifted to GDP at market prices.
Factor cost excludes indirect taxes, whereas market price includes them.
Shift from Factor Cost to Market Prices
Data sources also changed materially.
The 2004-2005 series relied heavily on the Index of Industrial Production (IIP) and the Annual Survey of Industries (ASI) for industrial output.
The 2011-2012 series expanded coverage by using corporate filings from the MCA-21 database and stock exchange disclosures, significantly widening the sample base, especially in manufacturing and services.
The revision effectively diluted some of the sharp peaks seen during the Singh years, even though the period still stands out as one of India’s strongest growth phases.
Feature Presentation: Ashish Narsale/Rediff
