Change of base year to calculate macro-economic indicators normal : MosPI

Speed Post News Network

New Delhi : The Ministry of Statistics and Programme Implementation (MoSPI) has been regularly bringing out macro-economic aggregates and indicators. The statistical processes involved in producing such estimates are open, transparent and in line with the best international practices and standards. The processes and estimates are evolved after detailed deliberations in various technical committees and the recommendations placed in the public domain. Efforts have also been made to increase the sample size and use of high frequency data released by various agencies.

However, recently certain sections of the media have reported on the revision in base years of various statistical products and estimates brought out by the Government of India and the Back Series of these estimates, according to a PIB release.

Change of base year to calculate macro-economic indicators area are normal activity undertaken periodically. This is in line with the global effort in the G20 and other fora to capture economic information accurately and to analyse the changing structure of the economy. While undertaking revisions, it is also a global statistical practice to continuously identify and tap new data sources in the economy which have wider coverage and where data is available regularly.

The Ministry of Statistics and Programme Implementation (MoSPI) has revised the base years of the Gross Domestic Product (GDP) and the Index of Industrial Production (IIP) to 2011-12 and for the Consumer Price Index (CPI) to 2012. For the IIP and CPI, the item baskets were revised to remove items that were no longer relevant and include those that had become relevant since the last base revision. For the National Accounts estimates, the new series is a structural breakaway from the old series, as it includes information sources which have newly become available or are more regular than the earlier ones.

Normally, when a new series of National Account Statistics (NAS) is introduced with an updated base period, it is customary for the Central Statistical Office (CSO) to link the old series with the new series. For the compilation of a linked series, the standard methodology used by CSO is the splicing method and reworking the estimates as per the current series methodology at the component or detailed item level.

For the years from the last base (2004-05) to the current base (2011-12), the components are re-estimated by following the same procedure as for the new series of NAS. For the years prior to previous base year (2004-05), the estimates are prepared by using the splicing technique. This implies that there would be no change in the growth rates of aggregates for the same years between the old series and new series. For back casting the series till 2004-05, various alternatives are being worked out and the back series will be finalised and released after due consultation with Advisory Committee on National Accounts.

The Committee on Real Sector Statistics also looked at the issue of data challenges in bringing out the Back Series of GDP (Base 2011-12) as several new sources had been used in the current series which were not available or not reliable in the earlier series (Base 2004-05).  The Committee approached the data challenges using different approaches.

The recommendations of the NSC Committees will be examined by MoSPI and other experts for deciding on the appropriate methodology to be adopted for generating the Back Series estimates for each sector.The Advisory Committee on National Accounts Statistics will be deliberating on the Back Series estimates before finalising the same for continuity, consistency and reliability, said the PIB release.