Chief Economic Adviser V Anantha Nageswaran has dismissed criticism of India’s 7.8% real GDP growth in the first quarter of FY27, saying that attempts to calculate a lower growth rate by comparing GDP figures from different statistical series are not valid.
The criticism was based on comparing last year’s Q1 GDP estimate of around ₹86 lakh crore with the latest estimate of nearly ₹88 lakh crore. Nageswaran said such a comparison was incorrect because the two figures were prepared using different base years and estimation methods.
CEA explains GDP methodology change
Speaking to The Hindu BusinessLine, Nageswaran said the previous GDP figure was calculated under the old 2011-12 base year series, while the latest data uses the revised 2022-23 base year series.
He argued that a meaningful comparison would require estimating what last year’s GDP would have been if the earlier methodology had continued. Only then, he said, could the two figures be compared accurately.
The revised GDP series incorporates wider data coverage, updated methodologies and the use of double deflation. Nageswaran also rejected suggestions that the base-year revision was used to inflate growth numbers.
He pointed out that the revised methodology had actually reduced India’s nominal GDP estimate for FY26 by around ₹11 lakh crore, indicating that the changes were not aimed at artificially boosting economic growth figures.
Strong indicators support growth estimate
Nageswaran defended the use of double deflation, saying it provides a more accurate picture, particularly for manufacturing, where input costs and output prices may move differently.
He explained that many input prices in India are influenced by global markets, while output prices are determined largely by domestic economic conditions. Therefore, separating the impact of input and output prices provides a more realistic growth calculation.
The CEA also said the 7.8% GDP growth figure was supported by several high-frequency economic indicators. These included GST collections, e-way bill generation, automobile sales, export performance and bank credit growth.
According to Nageswaran, these indicators had already suggested strong economic momentum during the first quarter of FY27.
