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Informist, Friday, Jan. 30, 2026

 

--CEA Nageswaran: Base year revision may push FY27 GDP growth closer to 7.2%

--CEA Nageswaran:New CPI series won't change benign FY27 inflation outlook

--CEA: Don't see need for changes to Flexible Inflation Targeting framework

 

By Krity Ambey and Priyasmita Dutta

 

NEW DELHI – The revision of the base year for calculating the GDP could lift India's economic growth in 2026–27 (Apr–Mar) close to 7.2%, Chief Economic Adviser V. Anantha Nageswaran said Friday. The Economic Survey for FY26, authored by Nageswaran and his team, has projected GDP growth for FY27 at 6.8–7.2%.

 

The base-year revision could push the growth print "in the ballpark of 7.2%," the chief economic adviser told Informist. "Whether it gives us further upside to 7.2% or not, we will cross the bridge when we get there." The Ministry of Statistics and Programme Implementation is in the process of revising the GDP base year to FY23 from FY12. The ministry will release the GDP growth estimate for FY26 based on the new series on Feb. 27, and all subsequent GDP data releases will be based on FY23 prices. 

 

India last revised the GDP base year over a decade ago, shifting it to FY12 from FY05. That revision had resulted in a sharp upward adjustment to growth estimates, with FY14 GDP growth revised to 6.9% from 4.7%. That revision had also entailed changes in the methodology used to calculate GDP.

 

The Indian economy is estimated to grow 7.4% in the current fiscal year, based on FY12 prices. The second advance estimate for GDP growth on Feb. 27, which will be based on FY23 as the base year, is likely to offer a more accurate assessment of economic activity.

 

Apart from rebasing GDP, the statistics ministry is also working on revising the base year for the Consumer Price Index to 2024. The ministry has changed the weights of various components in the CPI basket, a move that could push retail inflation higher. However, Nageswaran said he does not expect the changes to have a significant impact on inflation expectations.

 

The new CPI series, with 2024 as the base year, will track the prices of 358 items, up sharply from prices of 299 items that the current series tracks. The current series uses 2012 as the base year. The government has also reduced the weight of food in the CPI basket to 34.8% from 39.1% and has raised the weight of items that constitute 'core' inflation to around 55-57%, from 47% in the old series.

 

"Benign inflation outlook will not be affected by the new CPI composition," Nageswaran said. The Economic Survey, however, has noted that rebasing the CPI series will have implications for inflation assessment and will warrant careful interpretation of price trends. The Reserve Bank of India has projected CPI inflation at 2% for FY26, and at 3.9% and 4.0% for Apr–Jun and Jul–Sept, respectively. Retail inflation averaged 1.3% in Apr–Dec, the lowest in the current CPI series.

 

Among other proposed changes related to economic indicators, the Flexible Inflation Targeting framework, under which the RBI aims to maintain CPI inflation at 4%, with a tolerance band of 2-6%, is also under review. The central bank had sought public feedback on the framework in September, and the review is expected to conclude by Mar. 31. The government and the RBI review the framework every five years. 

 

Even so, the government's top economist said no changes should be made to the inflation-targeting framework. "The market is familiar with a particular framework at this stage and there is so much uncertainty in the world, probably we shouldn't be compounding it," Nageswaran said.  End

 

Edited by Tanima Banerjee

 

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