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 while calculating real economic growth.
Khichdi Example Explains GDP Method
Using khichdi as an example, Subramanian explained how the method works when the prices of the final product and its ingredients rise at different rates.
“So think about just a simple example. Let's say I make Khichdi and I sell Khichdi. To make Khichdi, I need to use rice and lentils,” he said.
Explaining further, he said, “So, you know, the double deflator is actually you deflate the output at the price level, change in the price level of the output, and you deflate the input at the price level of the input so that you get, arrive at real quantities, and then you do arithmetic with the real quantities.”
Investment Shows Momentum
Subramanian also rejected concerns that investment indicators were failing to keep pace with GDP growth.
“This year, if you see Q1, the gross fixed capital formation, which is basically technical jargon for investment in the economy, has grown by 12 per cent,” he said.
He added that private capital expenditure by listed companies grew 11%, bank credit expanded about 20%, while the IIP for capital goods increased more than 15%.
However, Subramanian acknowledged concerns around job creation.
“That said, though, and I think this is something which we have to acknowledge, that overall, you know, the rate of employment creation, especially in the formal sector, you know, is actually not as high as the GDP growth,” he said.
