Why Have India’s Statistical Databases Been Upgraded?
Context
In November 2025, the International Monetary Fund (IMF) assigned India a ‘C’ grade for the quality of its national accounts statistics, citing concerns regarding:
- Data quality
- Representativeness
- Statistical methodologies
- Reliability of economic estimates
In response, the Government of India initiated a comprehensive overhaul of major statistical databases to improve the timeliness, accuracy, coverage, and credibility of official economic data.
Major Statistical Indicators Updated
The reforms cover four key statistical systems:
- National Accounts Statistics (NAS)
- Index of Industrial Production (IIP)
- Consumer Price Index (CPI)
- Wholesale Price Index (WPI)
Additionally, a new Producer Price Index (PPI) has been introduced.
National Accounts Statistics (NAS)
What is NAS?
The National Accounts Statistics (NAS) are compiled by the Ministry of Statistics and Programme Implementation (MoSPI).
NAS includes:
- Gross Domestic Product (GDP)
- Gross Value Added (GVA)
- Sector-wise output and growth estimates
- Government expenditure
- Private investment
- Household consumption
- Exports and imports
The data are released on a quarterly and annual basis.
Why Was Revision Necessary?
Earlier GDP and GVA estimates used 2011–12 as the base year.
Since then:
- Digital services have expanded rapidly.
- Organized manufacturing has gained importance.
- Consumption patterns have changed significantly.
- Some traditional sectors have declined in relative importance.
An outdated base year makes economic estimates less representative of the current structure of the economy.
Key Reforms in NAS
1. Change in Base Year
- Base year revised from 2011–12 to 2022–23.
- Provides a more realistic picture of the present economy.
2. Adoption of the Double Deflator Method
Under this approach:
- Output prices are deflated separately.
- Input prices are deflated separately.
This improves the estimation of real GDP growth by capturing changes in production costs more accurately.
Current Coverage
The method is presently applied to:
- Agriculture
- Manufacturing
It is expected to be gradually extended to other sectors.
3. Better Treatment of Multi-Activity Enterprises
Earlier Method
The entire output of a company was assigned to its principal activity.
New Method
Output is allocated proportionately across different activities and sectors.
Benefits:
- Improves sectoral estimates.
- Reduces statistical distortions.
- Reflects economic activity more accurately.
4. New Data Sources Incorporated
The revised NAS now uses:
- Goods and Services Tax (GST) data
- Periodic Labour Force Survey (PLFS) data
Improved methodologies have also been adopted to minimize statistical discrepancies.
Index of Industrial Production (IIP)
What is IIP?
The Index of Industrial Production (IIP) measures monthly industrial activity and covers:
- Manufacturing
- Mining
- Electricity
It is an important indicator used in GDP and GVA estimation.
Key Reforms
Base Year Revision
- Revised from 2011–12 to 2022–23.
Inclusion of New Sectors
The revised IIP now includes:
- Gas supply
- Water supply
- Sewerage services
- Waste management
Better Energy Data
Separate estimates are now provided for:
- Renewable electricity generation
- Non-renewable electricity generation
Enhanced Mineral Data
Provides more detailed information on mineral production.
Expanded Item Basket
| Indicator | Earlier | Revised |
|---|---|---|
| Items Covered | 839 | 1,042 |
| Item Groups | 407 | 463 |
This improves the representation of modern industrial activity.
Consumer Price Index (CPI)
What is CPI?
The Consumer Price Index (CPI) measures retail inflation faced by consumers.
Compiled by:
- Ministry of Statistics and Programme Implementation (MoSPI)
Importance of CPI
The CPI is used for:
- Monetary policy decisions by the Reserve Bank of India
- Dearness Allowance (DA)
- Dearness Relief (DR)
Key Reforms
New Base Year
- Updated to 2024.
Updated Consumption Basket
The revised basket is based on:
- Household Consumption Expenditure Survey (HCES) 2023–24
This ensures better reflection of present-day consumption patterns.
Expansion of Categories
| Indicator | Earlier | Revised |
|---|---|---|
| Major Categories | 6 | 12 |
| Goods & Services | 299 | 358 |
New Items Added
Housing
- Rural house rent included for the first time.
Digital Services
- Online media subscriptions
- Streaming services
Modern Energy Sources
- Compressed Natural Gas (CNG)
- Piped Natural Gas (PNG)
Improved Measurement
Data collection has been strengthened for:
- Telephone charges
- Railway fares
- Airfares
- Postal services
Obsolete Items Removed
The revised CPI excludes outdated products such as:
- VCRs
- DVD players
- Radios
- Tape recorders
- Audio cassettes
Wholesale Price Index (WPI)
What is WPI?
The Wholesale Price Index (WPI) measures inflation at the wholesale level.
Compiled by:
- Ministry of Commerce and Industry
Key Reforms
Base Year Revision
- Updated to 2022–23.
Expanded Coverage
| Indicator | Earlier | Revised |
|---|---|---|
| Items Covered | 697 | 957 |
Reclassification of Products
- Crude petroleum
- Natural gas
have been shifted from Primary Articles to Fuel and Power, improving classification accuracy.
Producer Price Index (PPI)
Introduction
In June 2026, India introduced the Producer Price Index (PPI).
What Does PPI Measure?
PPI tracks:
Input Prices
Prices paid by producers for raw materials and intermediate goods.
Output Prices
Prices received by producers for final products and services.
How is PPI Different from WPI?
| Feature | WPI | PPI |
|---|---|---|
| Covers Goods | Yes | Yes |
| Covers Services | Limited | Yes |
| Includes Indirect Taxes | Yes | No |
| Includes Transport Costs | Yes | No |
| Measures Producer-Level Inflation | Limited | Better |
Thus, PPI provides a more accurate picture of inflation faced by producers.
Future Roadmap
The Government plans to:
- Gradually phase out WPI over the next five years.
- Use CPI and PPI as India’s two principal inflation indicators.
Significance of the Reforms
Improved Accuracy
Updated base years better reflect the structure of the modern economy.
Better Policy Making
More reliable data improves:
- Fiscal policy
- Monetary policy
- Industrial planning
Enhanced International Credibility
The reforms address concerns raised by the IMF and strengthen confidence in India’s official statistics.
Better Measurement of Emerging Sectors
New-age sectors such as:
- Digital services
- Renewable energy
- Modern consumption patterns
are now better represented.
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