IMF backs India's updated GDP methodology, calls revision 'welcome development'

The International Monetary Fund (IMF) expressed approval for India's revised GDP calculation methodology on Thursday, praising it as a "welcome development" and noting that it aligns with the IMF's own advice. Krishna Srinivasan, Director of the IMF's Asia and Pacific Department, stated that the revised methodology adheres to best practices and is consistent with the IMF's guidelines, including those from its statistics department.

Srinivasan emphasized that the adjustments to the GDP methodology are in line with the advice provided by the IMF, stating that India has issued a note explaining the revisions to the GDP methodology. He acknowledged that while there is always room for improvement, the IMF commends the Ministry of Statistics and Programme Implementation (MoSPI) for enhancing GDP statistics.

India's GDP growth figures for the June quarter, released at 7.8%, faced controversy when former Finance Secretary S. C. Garg claimed that the data was artificially inflated by compressing previous year's figures. The opposition parties seized on these claims, questioning the integrity of the government's GDP data. Chief Economic Advisor V. Anantha Nageshwaran dismissed Garg's approach as "cherry-picking" data, arguing that the latest GDP figures, compiled using the financial year ending March 2023 as the new base, have led to revisions in the previous year's quarterly data.