9 hrs ago
Sanyal Defends India’s 7.8% GDP Growth Amid Opposition Questions
India reported that its economy grew 7.8% between April and June.
This was higher than the central bank’s earlier prediction of 7%.
One report describes the quarter as part of the 2025–26 financial year, while another describes it as part of 2026–27.
The government recently changed the reference year used to calculate growth from 2011–12 to 2022–23.
Sanjeev Sanyal said the change was needed because the Covid years were unusual.
He said car sales and company profits also suggest that the economy is strong.
Congress leader Jairam Ramesh said the calculations may hide economic weaknesses.
Former official Subhash Chandra Garg said the comparison figures and revised current-price data make the 7.8% figure worth examining carefully.
India’s economy reportedly grew 7.8% year-on-year in the April–June quarter, above the Reserve Bank of India’s 7% forecast and the 6.9% growth recorded a year earlier.
Economic adviser Sanjeev Sanyal defended the revised GDP methodology, saying no serious economist considers the data unreliable.
The government changed the GDP base year from 2011–12 to 2022–23 after delaying the update because the Covid-19 period was not considered a typical economic year.
Sanyal said stronger corporate profitability and car sales also indicated economic strength, while expecting growth to moderate in coming quarters.
Congress leader Jairam Ramesh and former Finance Secretary Subhash Chandra Garg questioned the figures, citing inflation, methodology changes, comparison bases and revised current-price data.
- Who
- Economic adviser Sanjeev Sanyal defended the figures, while Congress leader Jairam Ramesh and former Finance Secretary Subhash Chandra Garg raised concerns.
- What
- A dispute concerns India’s reported 7.8% quarterly GDP growth and the revised method used to calculate it.
- Where
- India; Sanyal and Garg discussed the figures in interviews with India Today, while Ramesh issued criticism on social media.
- When
- The data was released on Monday and the competing reactions were reported on Tuesday; the articles differ on whether the quarter belongs to financial year 2025–26 or 2026–27.
- Why
- The disagreement centers on the new GDP base year, changes to the calculation method, inflation, comparison data and revised current-price GDP figures.
Government Defense
Critics’ Concerns
Credibility of the estimate
Government Defense
Sanjeev Sanyal said no serious economist is calling the data unreliable and argued that company profitability and car sales support the picture of a strong economy.
Critics’ Concerns
Jairam Ramesh called the figures a distorted picture or “statistical gymnastics,” while Subhash Chandra Garg said the reported 7.8% growth raised doubts.
Reason for changing the base year
Government Defense
Sanyal said the update was delayed because the Covid years were not typical and that the revised methodology followed requests from international institutions such as the International Monetary Fund.
Critics’ Concerns
Ramesh alleged that the government changed the GDP methodology twice during the year, including moving away from the wholesale price index before the latest estimates.
Inflation and current-price data
Government Defense
Sanyal maintained that the revised GDP figures show strong growth and said the change added newer, faster-growing sectors to the measurement basket.
Critics’ Concerns
Ramesh said the gap between nominal and real GDP was inconsistent with wholesale price inflation above 9%; Garg said revised current-price figures and the comparison base made the result difficult to assess.
Key facts
- Reported quarterly growth
- 7.8% year-on-year in the April–June quarter
- Reserve Bank forecast
- 7% growth for the quarter
- Previous growth comparison
- 6.9% in the same quarter a year earlier, according to one article
- GDP base-year change
- From 2011–12 to 2022–23, announced in February
- Sanyal’s supporting indicators
- Corporate profitability and car sales
- Full-year forecast
- The Reserve Bank of India expects 6.7% growth for the full financial year 2026–27, according to one article
- Critics’ inflation concern
- Jairam Ramesh cited wholesale price index inflation of more than 9% and a reported 2.3% gap between nominal and real GDP
- Garg’s current-price comparison
- He said growth would have been below 2.5% using previously published current-price figures
Quotes
Subhash Chandra Garg
Former Finance Secretary raising concerns about GDP comparisons
“So under the circumstances, but even in any circumstance, 7.8% GDP growth rate is a very strong one. As I said, I will be personally expecting it to temper going into the next few quarters, but even then, I think you will get a very decent GDP growth rate print for the year as a whole.”
businesstoday.in
“I don't think anybody should complain. We did exactly what the IMF and others were asking us to do. No serious economist is going to complain about this. The GDP is very visibly strong, and it's showing through incidentally in other areas as well.”
businesstoday.in
Sources
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