Decoding India’s GDP base revision

C hanging the GDP base year is not just about changing how we calculate economic growth. It can also change our estimate of how large the economy was in rupee terms — what is known as nominal GDP. When one gets a better picture of the economy through new data, improved methods and wider coverage, our understanding of the economy has to be reviewed. Importantly, as recognised in international statistical practice, such revisions do not necessarily move in one direction: the estimated size of the economy can go up or down, depending on what new data, methods reveal.