Archive · 3 Sep 2026
CEA Defends 7.8% Q1 GDP Growth Estimate
Some commentators said India’s economy grew much more slowly than the government reported.
They compared two GDP numbers calculated using different methods.
The Chief Economic Adviser said this was like comparing scores measured with two different rulers.
He said the older number must first be recalculated using the newer method.
He also defended a technique called double deflation, which measures changes in input and output prices separately.
According to him, several other indicators already showed strong economic activity.
These included tax collections, vehicle sales, exports and bank lending.
He said GDP figures are normally revised as better information becomes available.
He also said creating jobs remains important, although many factors besides government policy affect employment.
Chief Economic Adviser V Anantha Nageswaran rejected claims that Q1 FY27 real GDP growth was only 2.6%.
He said last year’s ₹86 lakh crore estimate used an older base year and methodology, making direct comparison invalid.
India’s FY26 full-year nominal GDP was revised down from ₹357 lakh crore to ₹345 lakh crore under the new methodology.
Nageswaran defended double deflation, saying input and output prices can follow different trends, especially in manufacturing.
He said GST collections, e-way bills, vehicle sales, exports, credit growth and other indicators supported robust Q1 growth.
- Who
- Chief Economic Adviser V Anantha Nageswaran addressed criticism of India’s Q1 FY27 GDP estimate.
- What
- He defended the reported 7.8% real GDP growth and explained revisions to the GDP methodology and base year.
- When
- The Q1 FY27 GDP data were released on Monday; Nageswaran also referred to methodology changes announced in February and future revisions through February 2028.
- Where
- The interview was conducted by phone while Nageswaran was travelling in the United States.
- Why
- Commentators questioned the growth estimate after comparing an older ₹86 lakh crore GDP figure with a newer ₹88 lakh crore figure calculated under different methods.
Commentators’ Criticism
Chief Economic Adviser’s Response
Validity of the growth comparison
Commentators’ Criticism
Critics compared last year’s first-quarter GDP of ₹86 lakh crore with the current year’s ₹88 lakh crore and argued that growth was closer to 2.6%.
Chief Economic Adviser’s Response
Nageswaran said the two figures were calculated using different base years and methodologies, so they cannot be directly compared.
Effect of methodology changes
Commentators’ Criticism
Skeptics questioned whether changes such as double deflation affected the revised GDP figures and the reported growth rate.
Chief Economic Adviser’s Response
Nageswaran said the revision reflected several improvements, including broader coverage, better sampling and methodology, and double deflation; he noted that FY26 nominal GDP was revised downward rather than inflated.
Reliability of the 7.8% estimate
Commentators’ Criticism
Some observers questioned whether the official figure accurately represented underlying economic growth.
Chief Economic Adviser’s Response
Nageswaran said GST receipts, e-way bills, automobile sales, exports, bank credit and other high-frequency data were consistent with robust Q1 growth.
- Reported Q1 FY27 real growth
- 7.8%
- Contested alternative estimate
- Some commentators calculated growth of about 2.6% by comparing figures produced under different methodologies.
- Previous base year
- 2011-12
- Current base year
- 2022-23
- FY26 GDP revision
- The full-year estimate was reduced from ₹357 lakh crore to ₹345 lakh crore.
- CEA’s revised trend estimate
- The estimated real GDP growth potential was raised from about 6.5% in January 2023 to 7% in January 2026.
- Indicators cited as supporting growth
- GST collections, e-way bill generation, automobile sales, exports, bank credit, purchasing managers’ indices and core industry production.