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India has undertaken a comprehensive overhaul of its key statistical databases after receiving a 'C' grade—the second-lowest rating—from the International Monetary Fund (IMF) in November 2025 for the quality of its national accounts statistics. The reforms aim to improve the accuracy, timeliness, representativeness, and reliability of data used for measuring economic growth, industrial output, and inflation.

Why Was the Overhaul Necessary?

India's major statistical indicators were based on outdated base years, making them increasingly unrepresentative of the country's evolving economy. The GDP, Gross Value Added (GVA), and Index of Industrial Production (IIP) were still based on 2011–12, while the Wholesale Price Index (WPI) also used 2011–12 and the Consumer Price Index (CPI) used 2012 as their base years.

As household consumption patterns changed significantly over the past decade, older indices continued to assign weight to obsolete products such as DVD players, VCRs, tape recorders, and cassettes, while failing to adequately capture emerging expenditures like online streaming services, CNG/PNG, rural house rent, and digital communication services. Such outdated databases reduced the accuracy of economic indicators and affected evidence-based policymaking.

Why Accurate Statistical Data Matters

Reliable statistics form the foundation of economic governance. They are essential for:

• Measuring real GDP and economic growth.
• Inflation targeting by the Reserve Bank of India's Monetary Policy Committee.
• Calculation of Dearness Allowance (DA) and Dearness Relief (DR).
• Fiscal planning, budgeting, and welfare policy formulation.
• Enhancing the credibility of India's macroeconomic data globally.

Key Reforms in National Accounts (GDP/GVA)

The base year for GDP and GVA has been revised from 2011–12 to 2022–23, making national income estimates more reflective of the present-day economy.

The revised series introduces significant methodological improvements. The Double Deflator Method has been adopted for agriculture and manufacturing, wherein input and output prices are adjusted separately to generate a more accurate estimate of real economic growth. Another important reform is the segregation of multi-activity enterprises, under which the output of companies engaged in multiple sectors is now allocated proportionately across those sectors instead of being assigned entirely to a single principal activity.

The revised estimates also incorporate richer datasets such as Goods and Services Tax (GST) information and the Periodic Labour Force Survey (PLFS), thereby improving data quality and reducing statistical discrepancies.

Changes in the Index of Industrial Production (IIP)

The IIP, which measures monthly industrial performance, has also adopted 2022–23 as the new base year.

The revised index expands its coverage by including activities such as gas supply, water supply, sewerage, and waste management, in addition to manufacturing, mining, and electricity. Greater product-level detail has also been introduced by separately tracking renewable and non-renewable electricity generation and various categories of minerals.

The number of products covered has increased from 839 to 1,042, while item groups have expanded from 407 to 463, making industrial measurement more comprehensive.

Reforms in Inflation Measurement

Consumer Price Index (CPI)

The base year has been updated to 2024, with weights derived from the Household Consumption Expenditure Survey (HCES) 2023–24.

The revised CPI reflects changing consumption behaviour by:

• Expanding categories from 6 to 12.
• Increasing the number of goods and services from 299 to 358.
• Including rural house rent, online streaming services, CNG, PNG, and improved measurement of transport and communication services.
• Removing obsolete products such as VCRs, DVD players, radios, tape recorders, and cassettes.

Wholesale Price Index (WPI)

The base year has been revised to 2022–23, while the number of commodities has increased from 697 to 957. Commodity classification has also been rationalised, with crude petroleum and natural gas now placed under the Fuel and Power category.

Producer Price Index (PPI): A New Addition

In June 2026, the government introduced the Producer Price Index (PPI) to provide a more accurate measure of producer-level inflation.

Unlike the WPI, the PPI:

• Separately measures input costs and output prices.
• Excludes indirect taxes and transport costs.
• Covers both goods and services, making it a more comprehensive indicator of production costs.

The government has indicated that the Wholesale Price Index (WPI) will be phased out over the next five years, after which the CPI and PPI will become India's principal inflation indices, bringing the country's statistical system closer to international best practices.

Significance

The overhaul of India's statistical databases marks a major step towards strengthening the country's statistical architecture. Updated base years, improved methodologies, expanded data coverage, and the introduction of the Producer Price Index will make economic indicators more representative of current realities and improve the quality of policymaking. These reforms are expected to enhance the credibility of India's macroeconomic statistics, facilitate better inflation and growth measurement, and align the country's statistical framework with global standards.