SBI’s independent analysis found India’s Q1 FY27 real GDP growth at around 7.4%, close to MoSPI’s official 7.8% estimate.
NEW DELHI: India’s Ministry of Statistics and Programme Implementation reported Q1 FY27 real GDP growth of 7.8% on August 31, under a newly rebased 2022-23 series. Within days, former Finance Secretary Subhash Chandra Garg publicly argued the real figure was closer to 2.6%, a claim that quickly spread through political and media commentary, suggesting India’s much-touted growth print was statistically inflated.
The dispute, when traced to its source, comes down to a basic measurement error, comparing numbers drawn from two different base years as though they were on the same scale.
How the Official 7.8% Was Calculated
MoSPI’s headline number compares Real GDP of ₹81.36 lakh crore in Q1 FY27 against ₹75.46 lakh crore in Q1 FY26, both measured under the identical 2022-23 base year, using the same price deflators, sectoral weights and methodology. This is what economists call an intra-series comparison: both the numerator and denominator sit on the same measuring scale, so the resulting 7.8% reflects actual volume growth in the economy, not statistical artefacts.
Where the 2.6% Figure Actually Comes From
The critique instead compares Q1 FY27 nominal GDP under the new base (₹88.27 lakh crore) against Q1 FY26 nominal GDP as it was originally published under the old 2011-12 base year back in August 2025 (₹86.05 lakh crore). Subtracting these two figures, drawn from different statistical series with different price bases, different sectoral weights and different coverage, produces a nominal growth rate of roughly 2.6%, far below the officially reported 10.3% nominal growth.
Why This Comparison Doesn’t Work
International standards, including the UN System of National Accounts and the IMF’s Quarterly National Accounts Manual, explicitly prohibit deriving growth rates by comparing absolute output levels across different base-year series. When a base year changes, three things shift simultaneously: the price weighting structure, the coverage boundary (new datasets like GST filings and enterprise surveys get folded in) and the underlying valuation methodology. Subtracting an old-series level from a new-series level conflates output change with these structural shifts, producing a number that measures neither cleanly.
A Simple Way to See It
Think of weighing the same shipping container on an old mechanical scale, which reads 86.05 tons and then on a newly calibrated digital scale, which reads the identical container at 80.00 tons. The container’s actual weight never changed; the instrument did. If you then weigh a different, heavier container on the digital scale and get 88.27 tons, comparing that reading to the original mechanical-scale figure produces a meaningless “weight gain” that mixes recalibration with real change. That is precisely the arithmetic behind the 2.6% claim.
Why the Base Year Changed at All
MoSPI shifted the base year to 2022-23 in February 2026, the earliest “normal” post-pandemic year, incorporating high-frequency administrative data like GST filings, expanded sectoral deflators (now over 300 item groups, up from roughly 180), new Producer Price Indices and double deflation for manufacturing. These are widely accepted statistical upgrades, not manipulations and India has revised its GDP base year multiple times before, in 1993-94, 1999-2000, 2004-05 and 2011-12, each time recompiling historical data under the new methodology rather than splicing old and new levels together.
Independent Verification
State Bank of India’s economic research division examined the 2.6% claim independently and found it methodologically unsound, estimating that even using alternative constant-deflator assumptions under the new base, real growth still comes out around 7.4%, closely tracking the official 7.8% figure.
Where Legitimate Questions Remain
None of this means the new series is beyond scrutiny. Manufacturing showed nominal GVA growth of 7.7% against real growth of 9.2%, producing a negative implicit deflator of -1.5%, because input prices for metals and energy rose faster than final output prices under the new double-deflation method, a pattern MoSPI says mirrors similar effects in OECD economies during raw material price swings. Mining showed an even starker divergence: nominal GVA grew 22.3% while real GVA contracted 2.4%, driven by crude oil and natural gas prices spiking over 30-70% even as physical extraction volumes fell. A statistical discrepancy between output-side and expenditure-side GDP estimates also persists, though this typically narrows as more complete annual data arrives in later revisions.
What Would Actually Improve Transparency
Statisticians point to three concrete steps that would help settle debates like this one before they start: prompt publication of the complete recompiled historical back-series under the new base year, full disclosure of the Supply and Use Tables and commodity-flow deflators used in double deflation and a formal, published revision calendar distinguishing routine data updates from structural rebasing exercises.
The Bottom Line
The 7.8% figure is the methodologically valid, apples-to-apples growth rate for Q1 FY27, arrived at by comparing like with like under a single, consistent statistical framework. The 2.6% figure is not a hidden truth beneath the official number; it is what happens when two different measuring scales get treated as one. Real debate about India’s new GDP series belongs in the more technical corners, deflator construction, sectoral divergences and data transparency, not in a subtraction that was never valid to begin with.
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