The Government of India is proposing to adopt the base year of the Modernised Indices as 2024-25 as a part of efforts towards greater accuracy and relevance in the economic statistics. Its goal is to revise or revamp broadly used economic indicators to reflect the new consumption patterns, production structures and market realities. The new Base Year for the Modernised Indices 2024-25 is likely to enhance the quality and reliability of economic policymaking, the ability to measure inflation, and support government planning. Economies are changing rapidly, and it is important that statistical indicators are kept relevant by undergoing periodic revisions in the base years.
Key highlights of the Base year for Modernised Indices 2024-25
- Major economic indicators to be proposed for revision by the Government.
- The new framework would be based on the 2024-25 period.
- The updated indices will be more in line with the current economic situation.
- Changes with the intention of enhancing inflation and price measurement.
- This will afford policymakers better and more reliable economic data.
- With different consumption trends, statistical modernisation will be in line.
- Better data for businesses and researchers.
- The program helps information to inform the creation of effective policies.
What are the Modernised Indices 2024–25 Base Year?
The intention to revise and update economic activity, price, production and consumption trend indices is known as the Modernised Indices 2024–25 Base Year. This is a year in which a decision is made as a point of comparison with the rest of the economy. Consumer tastes, industrial organisation, technology and market environments evolve a lot over time. Thus, including the update of the base year makes sure the economic indicators are accurate and representative.
Objectives of Modernised Indices 2024–25 Base Year
- To enable the economic indices to reflect the present Indian economy in terms of its structure.
- To reflect recent changes in consumption, the structure of production and the growth of service.
- To make better use of data sources to enhance the accuracy and reliability of economic indicators.
- To integrate administrative data (GST, databases by sectors, etc.).
- Deliver timely and frequent information for policy making and economic analysis.
- To improve the measurement of services with the new Index of Services Production (ISP).
- To make different statistical indicators more comparable with the new base year.
- To be updated with technological progress, digitalisation, and new economic activities.
- To improve estimation methodologies to incorporate new weights and statistical practices of today.
- To facilitate scientific research, and the government, business and investor considerations on the basis of science.
(PYQs) on Economic Indices, CPI, WPI & Base Year Revision
| Year | Exam | Question | Options | Answer |
| 2024 | UPSC Prelims | Which organisation releases the Consumer Price Index (CPI) in India? | (a) RBI (b) NSO (c) NITI Aayog (d) SEBI | (b) NSO |
| 2023 | SSC CGL | Inflation measured at the retail level is reflected by: | (a) WPI (b) IIP (c) CPI (d) GDP Deflator | (c) CPI |
| 2022 | UPSC Prelims | The Index of Industrial Production (IIP) measures changes in: | (a) Agricultural Output (b) Industrial Production (c) Exports (d) Tax Revenue | (b) Industrial Production |
| 2021 | SSC CHSL | Wholesale Price Index (WPI) measures price changes at what level? | (a) Consumer Level (b) Wholesale Level (c) Retail Level (d) International Level | (b) Wholesale Level |
| 2020 | UPSC Prelims | Which institution is responsible for compiling the Index of Industrial Production (IIP)? | (a) RBI (b) NSO (c) Finance Commission (d) GST Council | (b) NSO |
| 2019 | RRB NTPC | A base year in an index number serves as: | (a) Target Year (b) Reference Year (c) Fiscal Year (d) Census Year | (b) Reference Year |
| 2018 | SSC CGL | Which index is commonly used by the RBI for inflation targeting? | (a) WPI (b) CPI Combined (c) IIP (d) BSE Sensex | (b) CPI Combined |
| 2017 | UPSC Prelims | GDP at constant prices is calculated using: | (a) Current Year Prices (b) Base Year Prices (c) International Prices (d) Market Prices Only | (b) Base Year Prices |
| 2016 | State PCS | Revision of the base year helps to: | (a) Reduce Population (b) Improve Data Relevance (c) Increase Taxes (d) Reduce Inflation | (b) Improve Data Relevance |
| 2015 | SSC CHSL | Which of the following is a measure of inflation? | (a) CPI (b) IIP (c) HDI (d) GDI | (a) CPI |
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Conclusion on India Tests New Statistical Indices Using 2024–25 Base Year
This initiative is an important step up in the evolution of the statistical ecosystem in India with the new proposed Base Year for Modernised Indices 2024-25. Adjustment of the economic indicators aims at better inflation measurement, policymaking, economic analysis and development planning as per the present economic situation. The Modernised Index Base Year initiative 2024-25 will ensure that the information on the economy remains relevant, accurate and that the structure of the Indian economy is reflected.
