·PIB·15 marks·250–350 words

The 2026 base-year revisions of GDP, CPI and IIP, together with the launch of the ISP, mark a reset of India's statistical system. Critically analyse.

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In this answer
  1. Why it is a reset
  2. Why the reset is incomplete

In 2026, MoSPI moved the GDP base year from 2011–12 to 2022–23 [1], the CPI to 2024=100 [2] and the IIP to 2022–23 [3]. It also launched a trial Index of Services Production (ISP) covering 19 sub-sectors [4]. Together these overhaul India's statistical system, but the reset is not yet complete.

Why it is a reset

  • Weights reflect today's economy: The new bases replace weights that were more than a decade old [1].
  • Better price measures (deflators): The new WPI came with Output PPIs and Service PPIs for seven services [5]. The IIP now uses Output PPI instead of WPI for 234 of 463 item groups (~36% of weight) [3].
  • A gap filled: The ISP is the first monthly measure of services output, the counterpart of the IIP [4].
  • More administrative data: The ISP uses GST outward supplies, and administrative data for air, rail, banking and insurance [6].
  • Transparency: A trial series asks for stakeholder feedback before the official index [4].

Why the reset is incomplete

  • Formal-sector bias: The ISP covers only GST-registered firms. MoSPI's FAQ says it does not cover informal services [6]. All three planned data sources leave out informal services [7].
  • Partial coverage: The 19 sub-sectors cover about 60% of services. Health and education wait for ASISSE results, and no aggregate ISP exists yet [4].
  • Deflator mismatch: Banking and insurance are still deflated by general CPI [6], even though Service PPIs now exist for both [5].
  • Revisions: Railway, banking and insurance indices use provisional data that is revised every year [4].
  • Different base years: GDP and IIP use 2022–23, CPI uses 2024 and the ISP uses 2024–25. This makes cross-index comparisons harder.
  • Filings vs output: More firms joining GST can raise reported sales even when real activity has not grown.

These reforms update the structure of India's statistics, but they measure the formal economy far better than the informal one. MoSPI should switch the ISP to Service PPI deflators and add health and education before releasing the aggregate index. It should also measure informal services through regular surveys. Done well, this would complete the reset and build the statistical capacity that SDG 17.18 calls for.

Sources

  1. 1New Series of GDP Estimates with Base Year 2022–23, PIB (27 Feb 2026): GDP base revised from 2011–12 to 2022–23
  2. 2Press Release of CPI on Base 2024=100 for May 2026, PIB: CPI's new base of 2024
  3. 3India's IIP records growth of 5.1% in May 2026, PIB: IIP base of 2022–23; Output PPI used for 234 of 463 item groups (36.02% weight)
  4. 4First Release of Sub-Sectoral ISP, PIB: 19 sub-sectors, ~60% coverage, trial series, health/education excluded, annual revisions
  5. 5Press Release on New Series of WPI and Producer Price Indices (Base 2022–23), PIB: Output PPI and quarterly Service PPIs for seven services
  6. 6FAQs on Index of Services Production, MoSPI: GST outward supplies, administrative-data sectors, CPI deflators, informal sector not covered
  7. 7An Approach Paper to Compilation of the Index of Service Production, MoSPI: administrative data, GST and ASISSE as sources; ISP limited to the formal sector

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