On 31 August, the Ministry of Statistics and Programme Implementation reported that India’s economy expanded by 7.8 per cent in real terms during the April-June quarter of FY 2026-27, surpassing the Reserve Bank of India’s forecast of 7 per cent. The Gross Value Added increased at an even higher rate of 8.2 per cent. This figure, ostensibly positive, coincided with the release of a new GDP series by MoSPI, rebased from 2011-12 to 2022-23. Five days after the announcement, the figure remains a subject of debate, reflecting the complexities of India’s statistical politics as much as the economic conditions.
That is why the 7.8 per cent GDP figure is ThePrint’s Newsmaker of the Week.
Herculean feat, or statistical sleight of hand?
The first reactions were triumphant. Prime Minister Narendra Modi, posting on X, called the growth a “herculean feat” achieved despite oil shocks and global supply-chain disruption, and took a dig at critics in the same breath, writing that, “Doomsayers were doomed and India bloomed…yet again!”.
Finance Minister Nirmala Sitharaman credited the number to sustained reform and “agile management of the economy”. HDFC Bank’s principal economist, Sakshi Gupta, attributed the economic strength to robust consumption, government expenditure, investment, and exports. Additionally, PM-EAC member Sanjeev Sanyal highlighted car sales and corporate profitability as non-governmental indicators supporting this narrative, asserting that “no serious economist” would contest such a strong economic performance.
Subsequently, a critical assessment emerged. Former Finance Secretary Subhash Chandra Garg told NDTV that, after considering the new methodology, the actual growth at current prices was approximately 2.6 per cent, rather than the reported 7.8 per cent. According to Business Today, Garg’s calculations indicated that MoSPI’s new series estimated the nominal GDP for the first quarter of the previous year at approximately Rs 80 lakh crore, compared to an earlier estimate of about Rs 86 lakh crore. In a separate interview with The Federal, Garg suggested that India’s real underlying growth was closer to 4-5 per cent, referencing the adage about “white lies, black lies, and statistics.” He refrained from directly accusing the government of fraud. The Congress party quickly amplified these claims: Pawan Khera stated that Garg had “punctured” the government’s figures, Jairam Ramesh described the 7.8 per cent figure as a “Greatly Distorted Picture”, and Supriya Shrinate accused the government of altering base-year data specifically to exaggerate the headline growth rate.
‘Apples and oranges’
The government’s response was prompt and precise. MoSPI Secretary Saurabh Garg expressed distress over allegations of data manipulation, calling it “painful” and emphasising the effort involved in compiling the figures. The technical critique of Garg’s calculation highlighted his comparison of a nominal GDP figure from the outdated 2011-12 base series with one from the updated 2022-23 base series. Officials described this as an “apples and oranges” comparison due to differences in weights, data sources, and estimation methods between the two series. BJP’s Amit Malviya criticised Subhash Chandra Garg’s 2.6 per cent calculation as erroneous, accusing him of misinterpreting the official data.
The debate intensified when former RBI Governor Raghuram Rajan contributed, not by addressing the arithmetic, but by questioning the implications of the reported growth figures. Rajan inquired why, if the economy is indeed expanding rapidly, there is a lack of job creation, sluggish private investment, industrialists’ reluctance to invest capital, and insufficient large-scale FDI inflows. He contextualised this within India’s demographic dividend, suggesting that robust headline growth failing to generate jobs and investment could squander the opportunities presented by the country’s youthful workforce. Additionally, Reuters reported that some private economists have raised concerns about whether the GDP deflator understates inflation compared to other price indicators, potentially leading to an overstatement of real growth, irrespective of the series employed.
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A number technically defensible & substantively contested
When political distractions are set aside, the outcome reveals a truly divided opinion. Regarding the specific statistical issue, the government’s stance appears more robust: the standard practice involves comparing GDP within a single, consistent series, and Garg’s widely circulated 2.6 per cent figure indeed combines two different series.
However, this technical advantage does not address the broader concerns raised by Rajan and others. An analysis by The Wire of the same data indicated that while manufacturing’s real Gross Value Added (GVA) increased by 9.2 per cent, its nominal share of GVA declined to a multi-decade low of 12.9 per cent. Additionally, exports (25.8 per cent) were surpassed by imports (30.9 per cent), thereby widening the net export deficit, and net indirect tax collections shifted from a growth of 7.6 per cent to a decline of 0.4 per cent, despite substantial monetary and fiscal support.
Whether the 7.8 per cent figure represents a genuine turning point or will be reconsidered once employment and investment data are updated will be determined in the next two or three quarters. Until then, it remains an uncommon instance where a straightforward economic statistic becomes a significant site of political and technical debate. This debate, rather than the statistic itself, constitutes the real story of the week.
Bidisha Bhattacharya is ThePrint Consulting Editor (Economics) and an Associate Fellow, Chintan Research Foundation. She tweets @Bidishabh. Views are personal.
(Edited by Aamaan Alam Khan)