RBI Governor Malhotra backs base-year revamp for GDP, CPI and IIP to sharpen policy signals
RBI Governor Sanjay Malhotra has welcomed the government’s move to revise the base year for major macro indicators—GDP, inflation (CPI) and industrial output (IIP)—saying updated series can improve the quality of economic signals used in policymaking. The overhaul is expected to refresh baskets, weights, data sources and methods, with new releases slated from February 2026 onward.
What is being revised
Reserve Bank of India (RBI) Governor Sanjay Malhotra has endorsed the government’s base-year revision for key macroeconomic indicators: the Consumer Price Index (CPI), Gross Domestic Product (GDP) and the Index of Industrial Production (IIP). The argument is straightforward: when an economy’s structure and consumption patterns change, older statistical bases can become less representative, weakening the signals policymakers rely on.
The governor’s remarks come as the Ministry of Statistics and Programme Implementation (MoSPI) prepares updated series that do more than simply shift a reference year. The revision is expected to incorporate new methods, updated weights and item baskets, and refreshed data sources, so the headline indicators better reflect current realities.
Why RBI cares about the base year
For the RBI, CPI is central because it anchors India’s inflation-targeting framework and influences interest-rate decisions. If the CPI basket and weights do not match how households actually spend today, inflation readings can be less precise. Malhotra has said that a modernised CPI can help the central bank interpret inflation pressures with greater accuracy.
GDP and IIP matter for reading growth momentum and underlying industrial activity. With services, digital activity and new business models expanding, a revised GDP base can help capture the evolving structure of the economy. Similarly, an updated IIP base can improve measurement of industrial momentum and shifts within manufacturing.
Timeline and what to watch next
Reports indicate the revised CPI series is scheduled to be released in February 2026, followed by the revised GDP series later the same month, with IIP revision expected later in the year. The key for markets and analysts will be how the revisions affect time-series comparability, sectoral weights and the interpretation of inflation and growth trends.
Economists typically track whether methodological changes lead to noticeable shifts in reported inflation or growth, and whether any back-series are provided to allow clean comparisons across years. The RBI’s support signals that the central bank sees the update as improving the statistical backbone required for calibrated monetary and macro policy.