Archive · 3 Sep 2026
Government Defends India’s 7.8% Q1 GDP Growth Amid Debate
India said its economy grew 7.8% from April to June.
This was higher than most experts and the central bank expected.
Some opposition leaders and economists questioned whether the number was calculated fairly.
The government recently changed the way it measures the economy, including the base year and some data sources.
This change also lowered the reported size of the economy for the same period a year earlier.
The government says numbers from the old and new systems should not be compared directly.
It explained that manufacturing can have higher real growth than money-value growth when input costs rise faster than product prices.
It also said GDP inflation is different from consumer and wholesale inflation because it covers the whole economy.
Officials said other indicators, including investment, automobile sales, credit and factory use, support the reported growth.
India recorded 7.8% real GDP growth in April-June Q1 FY27, above the Reserve Bank of India’s 7% forecast and economists’ 7.1% median estimate.
MoSPI attributed the estimates to a new 2022-23 base year, updated data sources, revised methods and new price indices.
Q1 FY26 nominal GDP was revised from Rs 86.05 lakh crore under the old series to Rs 80 lakh crore under the updated series.
MoSPI said manufacturing’s negative implicit deflator resulted from separately adjusting output prices and intermediate input costs through double deflation.
Opposition leaders and some economists questioned the revisions, inflation estimates and whether the methodology made growth appear stronger, while the government rejected claims of manipulation.
- Who
- The Ministry of Statistics and Programme Implementation defended the estimates against criticism from opposition leaders, economists and former finance secretary Subhash Chandra Garg.
- What
- The government defended 7.8% real GDP growth in Q1 FY27 and explained revisions and methodological changes in the new GDP series.
- When
- The growth data were released on Monday, followed by MoSPI’s six-question explanation or FAQ on Wednesday; the updated estimates were reported as released on August 31.
- Where
- The figures concern India’s economy, while the debate occurred in political circles, media and social media.
- Why
- Questions arose over the revised previous-year GDP figure, the relatively low GDP-based inflation rate, manufacturing’s negative deflator and other methodological issues.
Critics’ Concerns
Government’s Defence
Revision of Previous-Year GDP
Critics’ Concerns
Critics argue that reducing Q1 FY26 current-price GDP from Rs 86.05 lakh crore to about Rs 80 lakh crore makes the latest growth rate appear stronger. Subhash Chandra Garg argued that growth could instead be close to 2.6% in real terms.
Government’s Defence
MoSPI says the two figures belong to different GDP series. The change reflects the new base year, updated data sources, revised methodologies and updated indicators, so the figures should not be compared directly.
Inflation and Real Growth
Critics’ Concerns
Critics question why the implicit GDP inflation rate was about 2.5%, below consumer inflation of around 3.9% and wholesale inflation above 9%, and why manufacturing’s real growth exceeded its nominal growth.
Government’s Defence
MoSPI says the GDP deflator covers the entire domestic economy and uses hundreds of price measures, unlike the narrower CPI and WPI. It says manufacturing’s negative deflator can result from double deflation when input prices rise faster than finished-goods prices.
Credibility of the Estimate
Critics’ Concerns
Congress leaders described the figures as “statistical gymnastics” and alleged that methodological changes made headline growth look stronger than the underlying economy. Some economists also questioned the technical calculations.
Government’s Defence
The government said the 7.8% figure is methodologically correct and supported by indicators including corporate profitability, automobile sales, investment, credit growth and factory utilisation.
- Q1 FY27 real GDP growth
- 7.8% in April-June
- Q1 FY27 real GDP
- Rs 81.36 lakh crore, compared with Rs 75.46 lakh crore a year earlier
- Q1 FY27 nominal GDP
- Rs 88.27 lakh crore, up 10.3%
- GDP base year
- The new series uses 2022-23 instead of 2011-12
- Q1 FY26 revised nominal GDP
- Rs 80 lakh crore under the latest series, compared with Rs 86.05 lakh crore under the old series
- Manufacturing GVA
- Nominal GVA grew 7.7%, while real GVA grew 9.2%, implying a negative deflator of about 1.5%
- Mining and quarrying GVA
- Real GVA contracted 2.4%, while nominal GVA increased 22.3%
