For the first time in more than a decade, India is preparing to change the lens through which it measures its economic performance. Beginning February 2026, the Ministry of Statistics and Programme Implementation (MoSPI) will roll out a new series for Gross Domestic Product (GDP), retail inflation, and industrial production—an update that economists describe as both overdue and essential.
At the heart of this reform lies a shift in the base year used for calculations. GDP and the Index of Industrial Production (IIP) will now be benchmarked to 2022–23, replacing the outdated 2011–12 base. Retail inflation, measured through the Consumer Price Index (CPI), will adopt 2023–24 as its new reference year. The revised data will be released in phases, with inflation figures arriving first in mid-February 2026, followed by GDP estimates later that month and industrial production data in May.
Why Base Years Matter
A base year is more than a technical reference point—it defines how economic growth, prices, and production are compared over time. When the base year becomes too old, it fails to capture changes in technology, consumer behavior, and the structure of the economy.
India’s economy today bears little resemblance to that of 2011. Digital services, platform-based businesses, financial innovation, and changing consumption patterns have transformed how value is created and spent. Yet official statistics have continued to rely on assumptions rooted in a much earlier period. The new base year seeks to correct this mismatch.
What’s New in the GDP Calculation
The upcoming GDP series introduces several methodological upgrades designed to reflect the modern economy more accurately.
One major change is the inclusion of Limited Liability Partnerships (LLPs), a fast-growing business format that had remained largely outside earlier estimates. Their addition is expected to capture economic activity that previously went undercounted, particularly in professional and service-based industries.
Another improvement involves multi-activity firms. Instead of assigning a company’s entire output to a single sector, the new method allocates production across different activities. This allows for a more precise picture of sector-wise growth, especially in diversified enterprises.
The measurement of the unincorporated and informal sector—a crucial part of India’s economy—will also improve. Greater use of recent enterprise surveys will help bring informal businesses and self-employed workers into clearer statistical focus.
Perhaps most importantly, MoSPI plans to eliminate the long-standing “discrepancies” item in GDP calculations, a residual category that often raised questions about data reliability. Its removal is expected to strengthen confidence in official figures.
A Fresh Look at Inflation
The CPI revision is equally significant. Over the years, household spending patterns have evolved, with families allocating a smaller share of their budgets to food and more to education, healthcare, transport, and leisure.
The updated CPI basket will reflect these shifts by adjusting weights accordingly. As a result, inflation numbers are likely to better represent the cost pressures actually faced by households today—an essential improvement for monetary policy.
Why This Matters for Policy and Markets
More accurate data leads to better decisions. For the government, realistic GDP and inflation estimates will improve budgeting, welfare targeting, and long-term planning. For the Reserve Bank of India, clearer inflation signals will support more informed interest-rate decisions.
Internationally, the revision enhances India’s credibility. Most major economies update their base years every five years; India’s move brings it closer to global statistical standards and improves the comparability of its data with that of other countries.
Looking Ahead
While the transition to a new GDP series may initially complicate comparisons with past growth numbers, the long-term benefits are clear. A modern economy needs modern measurement tools.
By updating its statistical framework, India is not changing the economy itself—but it is changing how that economy is understood. And in an era where data shapes decisions, that shift could prove just as important as the growth it seeks to measure.