Which of the following best describes the 'double deflator' method recently incorporated into India's national accounts?

A method that adjusts input and output prices separately to estimate real GDP growth

A method to account for both direct and indirect taxes in industrial output

A process of adjusting GDP figures based on foreign exchange fluctuations

A technique to calculate inflation by averaging CPI and WPI

What is the primary objective of introducing the Producer Price Index (PPI) in India?

To accurately track prices producers pay for inputs and receive for outputs, excluding indirect taxes

To replace the Consumer Price Index for calculating Dearness Allowance

To provide a comprehensive measure of household consumption expenditure

To monitor retail price inflation for essential commodities

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21 June 2026

Upgrades to India's statistical databases

This is a major national policy update regarding the revision of base years and methodologies for key economic indicators like GDP, IIP, CPI, and WPI, which are fundamental to economic planning and policy-making in India.

Notes

MoSPI and Ministry of Commerce and Industry have upgraded key statistical databases to improve timeliness, representativeness, and accuracy.
National Accounts (GDP/GVA): Base year updated to 2022-23. Adoption of 'double deflator' method for agriculture and manufacturing to adjust input/output prices separately.
Multi-activity enterprises: Output now allocated proportionately to each sector rather than the primary sector.
IIP: Base year updated to 2022-23. Expanded coverage includes gas, water, sewerage, and waste management. Item basket increased to 1,042 products.
CPI: Base year updated to 2024. Weights pegged to 2023-24 Household Consumption Expenditure Survey. Items increased from 299 to 358, including modern services like online media.
WPI: Base year updated to 2022-23. Item count increased to 957. Crude petroleum and natural gas moved to 'Fuel and Power' category.
Producer Price Index (PPI): Introduced to track input/output prices for producers, excluding transport and indirect taxes. To replace WPI in five years.
Rationale: Outdated base years (2011-12) failed to capture current consumption patterns and economic structural shifts, affecting monetary policy and government welfare payments.

Part of a longer story

This is day 1 of 15 in Upgrades to India's statistical databases, which has been running since 21 June 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

Why is the periodic revision of base years for national accounts and price indices essential for effective macroeconomic policymaking in India? 150 words

Attempt this — 150 words in 8 min

0 / 150 words 8:00
Discuss the significance of the 'double deflator' method and the transition to a Producer Price Index (PPI) in enhancing the accuracy of India's economic growth and inflation measurement. 250 words

Attempt this — 250 words in 11 min

0 / 250 words 11:00

Prelims

Which of the following best describes the 'double deflator' method recently incorporated into India's national accounts?

What is the primary objective of introducing the Producer Price Index (PPI) in India?

Syllabus

Indian Economy GS3

Topics

Sources

Why have India’s statistical databases been upgraded?

250words.in · https://250words.in/daily/2026-06-21/upgrades-to-india-s-statistical-databases