Base effect
Also called: low base effect
A large percentage change caused mainly by an unusually small or unusual starting value, rather than by a large change in amount.
Percentage changes are measured from the starting value, so a small or unusually low starting point produces a big percentage even when the change in rupees is modest. The same applies in reverse after an unusually high period.
Base effects are common in quarterly results, inflation figures and growth rates after a bad year.
Example
Profit rising from ₹2 crore to ₹3 crore is a 50% rise, while profit rising from ₹100 crore to ₹110 crore is only 10%, though it adds ten times as many rupees.
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