On September 24, the Ministry of Statistics and Programme Implementation (Mospi) hosted a conference in Mumbai, bringing together over 50 economists and forecasters from various organisations to discuss the revision of the base year for India's Gross Domestic Product (GDP).
This event underscores the importance Mospi places on wider consultation, especially given the criticism and debates surrounding previous base year revisions. The involvement of such a large number of experts highlights the ministry's intent to ensure transparency and address the concerns raised during earlier base year changes.
GDP is a broad measure of a country's economic size and is commonly used to compare the economic performance of different countries, particularly in terms of the growth rate of economic activity.
It is usually more meaningful in “real” terms, i.e., netting out the effect of price changes or inflation over the years. Macroeconomic data like GDP requires a base year to provide a reference point for measuring economic growth over time. The base year for macroeconomic data is revised periodically to ensure that the economic measurements accurately reflect the current structure of the economy and account for changes in the relative prices and output composition.
PC Mohanan, former acting chairman of the National Statistical Commission (NSC), said that a base year enables inter-year comparisons as it gives an idea about changes in purchasing power of the people and allows calculation of inflation-adjusted growth estimates.
“However, the indicators that constitute the calculation of GDP in a particular base year become obsolete, which renders the inter-year comparisons pointless as the economy is continually undergoing structural changes. This prompts the need for determining a new base year, which leads to the reconstitution of the indicator basket and provides a more accurate picture of economic growth and trends over time,” he added.
This story is from the October 11, 2024 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the October 11, 2024 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Brokerages upbeat on Vedanta despite 15% fall
Operational efficiencies, capacity expansion driving analysts' optimism
1 of 4x listed firms paid over 20% of profit to related party as royalty: Sebi study
A study conducted by the Securities and Exchange Board of India (Sebi) has uncovered some alarming trends in royalty payments made by listed companies, with some of them doling out more than 20 per cent of their net profits as royalty to related parties.
Near-term demand woes to keep Samvardhana's margins under pressure
The stock of the largest listed auto component company, Samvardhana Motherson International, has shed about 23 percent of its value over the past month.
New F&O entrants to reshuffle the deck for Nifty 50, Sensex
Newcomers primed to shine, driven by index inclusion hopes
Equity MFs keep powder dry amid volatile markets
Active equity schemes held nearly ₹1.7 trillion in cash at the end of October
Musk's call for $2 trillion spending cut bad for markets: Chris Wood
Billionaire Tesla Chief Executive Officer (CEO) Elon Musk's ambitious plan of cutting at least $2 trillion of federal spending under incoming President Donald Trump's administration will boost the US dollar while hurting stock markets, Christopher Wood, global head of equity strategy at Jefferies, said on Thursday.
FTA SOP OPERA
After years, a standard operating procedure for FTA talks is back on the govt's agenda. How far can it help?
Universal Studios looks to join Excel cast with stake buy
This comes hot on heels of Poonawalla-Dharma deal
Jabil to invest ₹1K cr for setting up electronics unit in Gujarat
The Gujarat government on Thursday signed a memorandum of understanding (MoU) with leading electronics manufacturing services (EMS) company Jabil to set up its EMS unit with ₹1,000 crore investment in Dholera Special Investment Region (DSIR).
'India pipeline significant, we will double it in next three-five years'
InterContinental Hotels Group (IHG) plans to double its portfolio in India due to increased demand and government support. HAITHAM MATTAR, managing director of India, Middle East and Africa, and SUDEEP JAIN, managing director, South West Asia, IHG Hotels and Resorts, in an interview with Roshni Shekhar in Mumbai shed light on their growth plan in India and expansion of the group's revenue stream. Currently, IHG has 46 hotels in India and 58 are in the pipeline. Globally, it has over 6,300 open hotels in over 100 countries, and more than 2,000 are in the development pipeline. Edited excerpts:
