Method of measuring inflation GDP will change from February:Government will release a new series; current calculations based on 14-year-old data

The central government is going to make major changes in the parameters for measuring the country’s economy. From February 2026, retail inflation (CPI) and the country’s growth rate i.e. GDP figures will be released with a new series (new base year). Also from May 2026, Industrial Production i.e. IIP figures will also be released in the new series. The new base year for GDP and IIP will be 2022-23. While the base year for retail inflation will be 2024. The Ministry of Statistics and Program Implementation (MoSPI) has completed its preparation. Currently, GDP and retail inflation figures are calculated based on the old base year 2011-12. While in many countries of the world, this is updated every 5 years. The main purpose of this change in base year is to make the data more accurate according to current needs and consumption patterns. What will change with the new base year? Currently, the old base year is being used for calculating inflation and GDP in the country. Experts have been demanding for a long time that the base year should be updated. Because over the last decade, people’s spending patterns and product preferences have changed. With the new series, government data will be able to present a more realistic picture of the country’s economic situation. Weightage of food items will decrease Currently, food items have a significantly high share in retail inflation calculations. According to ministry officials, the weightage of food and beverage items may be reduced in the new series. This is because as people’s income increases, they start spending more on other amenities like education, health and entertainment instead of food. The new series will give more importance to these modern needs. IIP data will come in new series from May Industrial Production (IIP), which shows the pace of the country’s manufacturing and mining sector, will be shifted to a new series from May 2026. It will include those new products whose production has started in recent years. While those old items that are no longer in demand in the market may be removed from the list. Why was this change necessary? Statistics Ministry Secretary Saurabh Garg had earlier indicated that the data improvement process was underway. India is one of the fastest growing major economies in the world. In such cases, releasing data based on old standards often creates difficulties in policy making. With the new base year, the Reserve Bank (RBI) will also find it easier to make decisions on interest rates because they will have more accurate inflation data. How will it affect the general public? It does not directly affect the common person’s pocket, but government schemes are based on this data. If inflation data is accurate, the government will be able to take better steps to control prices. Also, accurate GDP figures increase foreign investors’ confidence in India’s economy. What is a base year? Base year is the year whose prices are considered as the base. That is, the average price of things in that year is given a value of 100. Then, prices of other years are compared with this base year. This shows how much inflation has increased or decreased. Example: Let’s say 2020 is the base year. That year one kilo of tomatoes was ₹50. Now in 2025 it became ₹80. So inflation = (80 – 50) / 50 × 100 = increased by 60%. This same formula is used in CPI, but it applies to all market items. How is the base year chosen and how does it work? ​