7.8% growth, but a Rs 6 lakh crore question: Why GDP data has sparked a debate
One of the biggest points of discussion and questioning is the revision to Q1 FY26 GDP at current prices, that is the figures for last year's same quarter numbers. Under the old 2011-12 series, GDP was estimated at Rs 86.05 lakh crore. However, under the new series, it has subsequently been revised to Rs 80 lakh crore.
The Indian economy experienced a 7.8% growth in GDP during the current fiscal year, despite ongoing tensions with Iran and the US. This figure has sparked controversy among experts and opposition parties who question the revised methodologies used to calculate GDP. Former finance secretary Subhash Chandra Garg has pointed out that if the previous year's GDP figures had not been revised downward, India's growth rate would appear much lower.
In February, the government revised the base year for GDP calculations from 2011-2012 to 2022-2023, leading to changes in GDP and growth rates for previous quarters. Garg argues that using the original Rs 86 lakh crore figure for the first quarter of the previous fiscal year would result in nominal GDP growth of only around 2.6%, with real growth close to zero.
However, the government rejects these allegations, stating that the revisions are due to a combination of factors such as new methodologies, updated data sources, and the incorporation of newer indicators. They also emphasize that the old Rs 86.05 lakh crore figure cannot be compared directly to the latest Q1 FY27 estimate, as they belong to different GDP series.
The controversy extends beyond the base year revision to questions about the GDP deflator, which is currently recorded at just 2.5%, while consumer price index (CPI) inflation stands at around 3.9%. The government maintains that these indicators cannot be compared directly, as they measure different aspects of the economy. The GDP deflator reflects the entire economy, including government spending, investment, exports, and services, and uses more than 300 individual price deflators.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
