India’s headline GDP growth of 7.8% in the April-June quarter has sparked debate following a change in the statistical base used to calculate growth and a substantial revision to GDP figures for the previous year. Former Finance and Economic Affairs Secretary Subhash Chandra Garg has questioned whether the 7.8% figure accurately captures the pace of economic activity, arguing that the revised comparison base makes the headline number harder to evaluate.
Speaking to Business Today, Garg noted that the real GDP figure for the first quarter of the previous financial year was initially published under the old GDP series, while the newly revised figure is now being used as the base for calculating growth in Q1 of 2026-27.
Garg acknowledged that the 7.8% growth rate appears strong on the surface but said the change in the base warrants closer examination.
According to him, comparing the latest growth figure with the revised base should be approached cautiously. He suggested that GDP growth at current prices could provide a more useful basis for analysis.
GARG QUESTIONS CURRENT-PRICE GDP REVISION
Garg also highlighted a significant revision to the current-price GDP figure for the first quarter of 2025-26.
He said the revised government data now shows nominal GDP growth for the quarter at 10.3%. However, he argued that using the figures originally released last year would result in nominal GDP growth of less than 2.5%.
Garg said the difference is substantial because the nominal growth rate changes considerably depending on whether the revised figure or the number originally published is used as the base.
He argued that the combination of the revised base and the major change in current-price GDP has raised questions over whether the reported 7.8% growth rate accurately represents underlying economic activity.
In another interview with India Today, Garg acknowledged that revisions are normal when a new GDP series is introduced.
He explained that a new series can incorporate additional products and companies, while some entities included in the previous methodology may no longer be counted. Such changes can naturally alter estimates of total production.
Garg said revisions to production values are not inherently problematic. His concern, he stressed, is the scale of the changes and the absence of sufficient explanation for them.
He argued that if the new methodology results in a significant reduction in GDP, the government needs to clearly explain the factors responsible for the change.
Garg pointed to a particularly large downward revision in GDP at current prices. He said GDP for 2023-24 was lowered by roughly Rs 12 lakh crore after the transition to the new series.
He said a revision of such magnitude requires greater clarity and also highlighted changes across various components of GDP.
According to Garg, agriculture and mining estimates have increased, while manufacturing has been revised down substantially. He also cited revisions to investment expenditure and consumption, describing the reduction in consumption as particularly sharp.
For Garg, these shifts underline the need to understand precisely how the old and new GDP series differ.
His remarks come amid an ongoing debate over India’s 7.8% GDP growth in the April-June quarter, with growing scrutiny of the new GDP series, the revised base and the substantial changes made to earlier-year data.
