Why was the 2011–12 GDP base revision criticized?
- Sunrise Classes
- Sep 12
- 1 min read
Background:
In 2015, India changed its GDP base year from 2004–05 to 2011–12.
Methodological improvements included using MCA21 corporate filings, improved deflators, and expanded coverage of sectors.
But growth rates for 2012–2014 looked much higher than earlier estimates, creating controversy.
Balanced Answer:The revision was technically aligned with UN System of National Accounts (SNA 2008). However, critics argued that MCA21 data overstated the formal sector, ignored informal sector contractions, and made GDP appear stronger than ground realities (like sluggish credit growth and weak corporate earnings).
Cross-Question: 👉 If methodology was sound, why was criticism so strong?
Because the results were inconsistent with other macro indicators (exports, credit, investment slowdown).
Lack of transparency in data access worsened trust issues.
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