GDP Numbers Win Former CEA’s Vote of Confidence, Methodology Gets ‘Cutting-Edge’ Praise
New Delhi: Former Chief Economic Adviser Krishnamurthy V Subramanian has defended India’s 7.8% GDP growth in the April-June 2026 quarter, rejecting questions over the credibility of the numbers and backing the methodology used to calculate them. Subramanian said India had shifted to the “cutting edge methodology of the double deflator”, which separately adjusts the prices of inputs and outputs…
Former Chief Economic Adviser Krishnamurthy V Subramanian praised India's 7.8% GDP growth in the April-June 2026 quarter, dismissing doubts about the data's reliability and endorsing the calculation method. He explained how India has adopted the "cutting edge methodology of the double deflator" to adjust input and output prices in real economic growth calculations.
To illustrate, Subramanian used khichdi as an example, detailing how the method works when the prices of the final product and its ingredients differ. He described the process of deflating the output price and input price to obtain real quantities, followed by arithmetic operations.
Regarding investment indicators, Subramanian addressed concerns that they were lagging behind GDP growth. He highlighted that gross fixed capital formation, or investment, grew by 12% in Q1, private capital expenditure by listed companies expanded by 11%, bank credit increased by about 20%, and the IIP for capital goods rose by over 15%.
However, Subramanian acknowledged that job creation, particularly in the formal sector, was not keeping pace with the GDP growth.
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