As we recently celebrated the birth of Krishna, this shloka from the Srimad Bhagavatam comes to mind:
manāṁsy āsan prasannāni sādhūnām asura-druhām,
jāyamāne ’jane tasmin nedur dundubhayaḥ samam
“As the Unborn One was being born on earth, the minds of all saintly persons became filled with profound peace and joy, while the oppressive anxiety caused by the wicked began to fade away. And the cosmic drums of destiny spontaneously resounded in the heavens.”
Political leadership may come and go, but when a vision for a country of 1.3 billion people gets translated into action, it takes a steely resolve to rise above all rhetoric and drama to achieve and execute the aspirations of an entire nation. Our honourable Prime Minister Narendra Modi’s leadership has once again proven its strength and ability to deliver on the promises.
We stand today at a threshold of immense possibilities as the world’s fifth-biggest economy grew 7.8 per cent, reported Reuters.
Decoding 7.8 per cent
The Ministry of Statistics and Program Implementation released data on 31 August, stating that India’s real GDP grew by 7.8 per cent in the April to June 2026 quarter. During the same period last year, the number was 6.8 per cent.
Taking the base year as 2022-203, real GDP was Rs 81.36 lakh crore, up from Rs 75.46 lakh crore last year. If you consider current prices, then nominal GDP registered a 10.3 per cent growth rate, reaching Rs 88.27 lakh crore against Rs 80 lakh crore last year. Real gross value also reached a figure of Rs 73.82 lakh crore, an expansion of 8.2 per cent, while nominal GVA was up by 11.5 per cent to become Rs 80.53 lakh crore.
These confusing terms used by economists can be simply decoded. We need to distinguish between real GDP, nominal GDP and GVA. Real GDP is the most useful measure of economic growth because it removes the effect of rising prices. So when the real GDP increased from Rs 75.46 lakh crore to Rs 81.36 lakh crore, it means that India actually produced more goods and services than it did a year ago, rather than the increase being caused simply by inflation. This gives us the 7.8 per cent real GDP growth figure. Nominal GDP, on the other hand, measures the economy using the prevailing prices; it includes both the increase in production and cost. That’s why nominal GDP grew faster, by 10.3 per cent, reaching Rs 88.27 lakh crore.
The gross value added, however, is a slightly different measure as it looks at the value actually created by India’s businesses and economic sectors. For example, the additional value created by a factory when it turns raw materials into finished products. Real GVA, therefore, tells us how much more value the economy actually created after removing the effect of prices. It grew by 8.2 per cent to Rs 73.82 lakh crore, while nominal GVA grew by 11.5 per cent to Rs 80.53 lakh crore because it also reflects higher prices.
Simply put, the important message is that India’s growth is real. The country is producing more and creating more economic value, not merely seeing its GDP rise because there has been a rise in prices.
Also Read: India’s 7.8% GDP number has convinced no one and everyone
What about the deterrents?
The fact that these numbers speak for themselves is quite commendable, especially given the existing geopolitical climate. Two conflicts that don’t belong to us, the US-Iran war and the Russia-Ukraine war, have caused tremendous volatility in the energy market.
Yet, the Indian economy has remained resilient despite supply chain disruptions and growing uncertainty in global trade. These also include the impact of US tariffs, which President Donald Trump routinely threatens to impose, and the assumed effect these threats may have on the Indian market.
But India’s growth has been supported by something else as well: an abundance of its own people. India has a large domestic market, and we see that private consumption grew 7.1 per cent while investment rose by 11.9 per cent. These factors helped offset some of the uncertainty coming from abroad. On the other hand, manufacturing expanded 9.2 per cent and services around 10 per cent, showing that growth was not entirely dependent on exports.
At the same time, India’s growth itself proved more resilient than expected, rising about 12 per cent in real terms in the quarter, helped by diversification of export markets and products. In layman’s terms, we can say that while India was not immune to the global shocks, we were able to absorb them.
Strong domestic demand, government capital spending, recovering private investment and the sheer size of the Indian consumer market provided a cushion when external conditions became difficult. This is perhaps the most encouraging aspect of the 7.8 per cent figure. It proves without a doubt that India’s growth is increasingly being driven by its own internal economic momentum rather than being wholly dependent on a benign global environment.
What the critiques say
Former finance ministry bureaucrat, Subhash Chandra Garg, believes that growth is higher because the government had changed the base year, which was the bedrock of comparison. Another Mr Garg from the Ministry of Finance rebutted the argument, which did not get the same coverage.
Senior economist Raghuram Rajan was on a completely different, antagonistic path and questioned why the strength of the GDP growth numbers isn’t translating into stronger results for the creation of jobs, or higher domestic investment and foreign influx in portfolios. The controversy could be settled in simple terms by using identical units for comparison, i.e., meter versus meter or km versus km, and so on. Yet, the same has been allowed to fester because it’s not about numbers or statistics; the entire argument has been reduced to redundancy, as the concern isn’t economics or GDP, but rather the building of a political narrative by the opposition wishing to showcase a failed economy.
The Indian economy is anything but a failed economy; it has not only been surviving but thriving in spite of challenges.
However, Rome wasn’t built in a day.
And to assume that the government is fudging numbers to create a positive economic outlook is ridiculous. These numbers are in the public domain over a period of time, and they are observed by all kinds of hawkish people from across the globe. The data is independent of any influence.
Sajjid Chinoy, Chief India economist at JP Morgan, told India Today: “But the question was, could India insulate that recovery from events in the Middle East, and this is where the government deserves enormous credit”.
Chinoy argued that India’s “cyclical growth recovery” has been apparent in the last six months, possibly due to a fiscal stimulus, last February’s cut in direct taxes, and reduction in interest rates.
Neelkanth Mishra, Executive Director at the World Bank for India, also supported the government’s stand by saying that the new GDP has enhanced the credibility of the estimates by “cleaning up data and significantly improving methodology”.
I definitely recall a report by the World Bank, which had challenged the earlier methodology of handling data. Now that the same institution is crediting the same, while the other naysayers continue to harp on about something which is based on transparency and accountability of information available in public records.
Two days ago, Modi visited SRCC after 13 years. While delivering the Teacher’s Day speech, the PM conveyed the same commitment, as he did in 2013, that is the message of good governance through speed, scale and skill. The GDP numbers are indicative of this common thread, which binds the commitment with action.
I am reminded of an old song, “Kuch toh log kahenge, logo ka kaam hai Kehna, In bekar ki baton mei kahin beet na jaye raina (People will say something or other; it is their nature to talk. Don’t let the night slip away amidst such idle chatter).”
Moral of the story: let naysayers say whatever they want. Your focus has to be on the work, performance and delivery; continue doing the same and communicate it too.
Meenakshi Lekhi is a BJP leader and lawyer. Her X handle is @M_Lekhi. Views are personal.
(Edited by Insha Jalil Waziri)